Consultant in talks with lenders as net debt rises 30% amid poor market conditions
Engineering consultant White Young Green has said it may breach one of its banking covenants as a result of poor market conditions.
The warning follows a 30% increase in net debt from £70.6m to £91.5m at the end of 2008.
At the announcement of its results for the six months to 31 December 2008, the company said: “The group's lenders have been informed of these circumstances and discussions with them regarding a remedy of a potential breach have commenced.”
Its share price fell 34% to 31p following the news.
Turnover in the period rose 8% from £134.1m to £144.5m but the company made a loss of £2.1m due to exceptional items of £11.1m. Bad debt accounted for £8m of the sum.
The company also announced that it had cut 235 jobs from its estimated 3,500 staff - representing about 7% of its workforce.
Chairman Peter Wood said: “The board has reviewed the group's operations and has taken a number of decisions to tackle the issues given the current economic climate. These include a review of the group work in progress and debtor position and swift and substantial cost reduction initiatives involving a reduction in headcount and a streamlining of the business.”
Breakdown by division:
- Turnover £44.5m (2007: £43.5m)
- Operating profit £2.1m (£2.3m)
- Turnover £16.1m (£15.9m)
- Operating profit £2.1m (£2m)
Environment, planning and transport
- Turnover £29.2m (£25.7m)
- Operating profit £4m (£3.2m)
- Turnover £29.9m (£22.7m)
- Operating profit £3.7m (£2.8m)
- Turnover £24.8m (£26.2m)
- Operating profit £200,000 (£1.4m)