High overheads drive WYG half yearly loss of £2.4m

High overhead costs have hurt engineering consultant WYG in the first six months of this year as it posted an operating loss of £2.4m, despite a restructuring initiative.

The company has moved nearly £40m debt off its balance sheet from the first half of last year to leave it with £24m in cash after a refinancing effort.

Revenue also fell to £68.5m from £83.7m for the first half of last year.

Chief executive Paul Hamer said the firm had expected the loss because of expensive professional indemnity insurance, born out of the company’s historical high debts, which peaked at over £100m in 2009 driven by a spate of acquisitions.

Hamer said: “The business is delivering at a project level very well but the overhead costs are high.”

Hamer confirmed that acquisitions over the last decade has left WYG currently operating 40 offices where it only really needed about 16 – it has already reduced the total from 80.  

He said he felt the business was now in strong position to capitalise on infrastructure initiatives announced by the chancellor in his autumn statement earlier this week.

“We have some niche opportunities to expand. We see opportunities with us to grow through customer such as the Ministry of Justice and the Ministry of Defence, where we manage their estates,” said Hamer.

He added that the company had a good balance of international and UK work across a mix of sectors for a variety of clients, which would lend it the satiability it needed to keep it overheads down.