Consultant kicks off efficiency review after closing North Associates business and cost of legacy contracts sends firm into the red
Consultant WYG plunged into the red last year as the cost of closing its North Associates land and property business and increased provisions for legacy contracts took their toll.
North Associates was bought in 2015 but was hit by delays to the planned Moorside nuclear power station near Sellafield on the Cumbrian coast.
WYG said the cost of shutting the Carlisle-based business was £3.2m while its bill for legacy contracts went up £2.5m.
The firm, which worked on the recently opened Royal Birmingham Conservatoire, had warned twice in 2017 that annual profits would be “substantially below market expectations”.
Reporting a pre-tax loss of £5.3m in the year to March 2018 on turnover up 1.5% to £153m, WYG announced a “wide-ranging” efficiency review to cut costs.
WYG said it was stripping out management layers with chief executive Douglas McCormick (pictured) adding the business was “taking the correct steps to return to growth”.
Project delays in the first half failed to dent the group’s consulting operation, which saw revenues rise 3% to £119m, with growth in almost all its main markets “albeit not quite enough to absorb all of the impact of the issues that affected the business in the first half”, the firm added.
But WYG’s international business took a 3% revenue hit, falling to £35.1m and the firm said it was closing its non-core Bulgarian and Romanian operations.
Operating expenses at the firm rose 6% to £158m.