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:

Engineering

  • Turnover £44.5m (2007: £43.5m)
  • Operating profit £2.1m (£2.3m)

Management services

  • Turnover £16.1m (£15.9m)
  • Operating profit £2.1m (£2m)

Environment, planning and transport

  • Turnover £29.2m (£25.7m)
  • Operating profit £4m (£3.2m)

Ireland

  • Turnover £29.9m (£22.7m)
  • Operating profit £3.7m (£2.8m)

International

  • Turnover £24.8m (£26.2m)
  • Operating profit £200,000 (£1.4m)

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