WYG: Order Books Driving Momentum
Edison | Dec 19, 2016 06:03AM ET
WYG Plc (LON:WYGR): H117 results showed good progress with unchanged full year guidance. Rising order books and confident management messaging support expectations of a good H2 profit uplift and healthy momentum going into FY18. These prospects are not fully reflected in WYG’s rating in our view.
Good progress in H117
Headline growth metrics were all very respectable in H117, with revenue up 17%, PBT up 18%, adjusted, fully diluted EPS up 8% and DPS up 20%. Different regional influences affected divisional performances, with MENA showing the best year-on-year improvement, while in the UK short-term progress was constrained by P&L investment and EAA remained subdued. Cash absorption into working capital was a notable feature of the move into a £4.9m net debt position at the half year stage, though we expect both aspects to effectively reverse by the year end. For us, a key H1 feature was the continued growth in the contracted group order book to £163.7m, compared to c £123m a year earlier and c £146m at the end of FY16.
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