WYG boss: Debt deal has made 'huge difference'

Paul Hamer, chief executive of engineering consultant WYG, has spoken of the “huge difference” its restructured balance sheet has made when bidding for work.

The deal, which was voted through by shareholders last month, saw its debt-pile cut in half to about £50m and its banks take a 60% stake in the company via a debt-for-equity swap and share issue.

Speaking after the company announced its results for the six months to 31 December 2009 earlier this week, Hamer said the fact debt was at a “sustainable level” following its refinancing deal had had a positive effect.

He said: “The financial position is one of the key factors when clients assess your strength and we now have that strength behind us.”

He also pointed to the effect on WYG staff. “It touches every part of the business including investors to staff, who now have a foundation of rock to stand on to go and win business.”

In the six months to 31 December, turnover fell 20% to £115.2m while it made a post-exceptional loss of £4.6m.

David Brockton, an analyst at Arbuthnot Securities, said: “With a new management team, a successful financial restructure, and some signs of progress there is scope to be optimistic in the group's longer-term future.”

Hamer also revealed that WYG plans to open offices in Croatia and South Africa within the next few months. He said the Croatian opening could be followed by an office in Serbia to drive its business in the Balkans. The company is expected to announce contract wins in the area shortly.

In the UK, Hamer said he had noticed a small pick-up in private sector work. “Activity levels have probably risen by 15% to 20% but in terms of that translating into workload it’s closer to a 5% increase.”

He said other growth areas were largely “legislation-driven”, pointing to waste, asbestos removal, transport and environmental planning.