Small Cap Value Report (3 Sep) - WYG, ALU, ATUK, HYD, JSG

Tuesday, Sep 03 2013 by
19

Good morning! WYG (LON:WYG) is a new company to me, it's a £65m market cap (at 108.5p per share) group, which as is so often the case, I am finding it incredibly difficult to work out what they actually do. The "what we do" section of their website doesn't throw a lot of light, saying:

 

Here at WYG we provide a diverse range of services to clients across numerous sectors worldwide, offering creative and effective solutions to their projects.

 

Well that's as clear as mud then. The "about us" section of their website throws no further light, so I have resorted to guessing what they do from the pictures. So it looks like some sort of design & building consultancy? Today's RNS describes themselves vaguely as:

 

 the global management and technical consultancy to the built and natural environment

 

So first rant of the day is to question why it is that so many Listed companies seem unable to give a clear & simple explanation as to what they actually do?! The fashion for dressing up simple activities into a confusing array of management-speak gobbledegook just puts me off even wanting to look at their figures, as I cannot fathom, quickly & easily, what their activites are.

Anyway, their trading update for the six months to 30 Sep 2013 sounds pretty good - in particular this section which augurs well for the UK economy as a whole:

 

In the UK, we have secured additional business across our core sectors of Defence and Urban Development including several projects related to the MoD's Base Optimisation programme and the Group is winning increased levels of planning and enabling work associated with the widely reported increase in activity in the construction and house building sector.

 

The conclusion is that current year profit expectations (which were raised in June) are now being raised again.

So to quantify that, current broker consensus is for 3.87p this year (ending 31 Mar 2014) and 5.67p next year. Therefore, one would imagine this year might be looking perhaps at nearer 5p per share, and say 6-7p next year if the improvements continue?

So at 108.5p the shares don't look particularly cheap, even once you factor in…

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WYG plc is a global project management and technical consultancy. The Company is engaged in creating and managing strategic assets by engaging with clients in the early stages of a project, and continuing to advise them throughout its lifecycle. The Company's segments are UK; EAA (Europe, Africa and Asia), and MENA (Middle East & North Africa, including Turkey). The Company offers an array of services, including aquatic ecology, brownfield regeneration, climate change adaptation, development management, energy management, flood risk assessment, health and safety management, intelligent transport systems, landscape planning, management training, nuclear decommissioning and asset care, outsourcing, planning applications, rural and agricultural development, and social and civil society development. It serves sectors, such as defense and justice, energy and waste, environment, mining and metals, transport, social development and infrastructure, and urban and commercial development. more »

LSE Price
54.5p
Change
 
Mkt Cap (£m)
40.2
P/E (fwd)
11.5
Yield (fwd)
3.5

The Alumasc Group plc is a building products, systems and solutions company. The Company's segments include, Solar Shading & Screening, Roofing & Walling, Water Management, and Housebuilding & Ancillary Products. The Solar Shading & Screening segment offers Levolux's architectural solutions, which are used to shade and screen buildings. The Company creates bespoke balcony and balustrading solutions. The Roofing & Walling segment provides waterproofing systems for flat roofs, roofing support services, exterior wall insulation systems and facade systems. The Water Management segment provides a range of industry solutions to help manage water originating inside or outside of the buildings and convey it in a controlled and safe way to discharge into water courses, sewers of the ground. The Housebuilding & Ancillary Products segment offers house building and ancillary products, such as ventilation products, cavity closers and trays, access panels, loft doors and dry roof verge products. more »

LSE Price
92.5p
Change
 
Mkt Cap (£m)
33.4
P/E (fwd)
5.6
Yield (fwd)
8.2

cloudBuy plc is a provider of an integrated software platform for e-procurement and e-commerce for the trading of goods and services between purchasers, such as public sector bodies and their suppliers, along with the analysis and coding of spend and product data. The Company's operating segments include Company Formation Services, Web and ecommerce services and Coding International Limited. It also provides services to new businesses, including incorporation, company secretary services and filing annual returns, using its software platform. Its solutions include e-commerce Marketplaces, e-commerce Websites, Purchasing Portals, SpendInsight and Company formations. SpendInsight service provides regular analysis of any company's historical spend data. It offers a range of Website packages from templated solutions to Intranets and global business-to-business (B2B) e-commerce sites. The cloudBuy platform enables rapid extension of its solutions and development of new applications. more »

LSE Price
1.98p
Change
 
Mkt Cap (£m)
2.6
P/E (fwd)
n/a
Yield (fwd)
n/a



  Is LON:WYG fundamentally strong or weak? Find out More »


9 Comments on this Article show/hide all

Beginner 3rd Sep '13 1 of 9

WYG (LON:WYG) don't actually 'do' anything: they're consultants!!!!

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BahrainChris 3rd Sep '13 2 of 9
1

You guessed correctly! - WYG (the company I always knew as White Young Green) are consulting engineers.

I think the comments about wage inflation are right on the money. There has been an unprecedented squeeze of salaries and bonuses in the construction industry and a significant percentage of people in the profession are simply sat on their hands waiting for an upswing. As soon as that happens, and there are signs of it already, the game of musical chairs is going to begin. That will obviously force salaries up.

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Gostevie 3rd Sep '13 3 of 9

Whenever a company says that what it does is 'provide solutions' that usually sets of a warning bell in my head. Unless they are a crossword-solving consultancy or something!

The best/worst example that I can remember of company that seems completely incapable of in explaining in plain English what it actually does is Imaginatik (LON:IMTK) .

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kevanp 3rd Sep '13 4 of 9
1

Not only is WYG (LON:WYG) a consultant, it's a consultant to the environment. (??)

How many times have I thought what you just wrote Paul. I've always had this nagging feeling that if a company's description of what they do is so flakey, the chances are that their accounts are too.

In the same vein, I've always hated the term "outsourcing". What does an outsourcing company do? I assume it provides services to other companies. But what services? It's a lazy expression, used by lazy practitioners.

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kevanp 3rd Sep '13 5 of 9

In reply to post #76779

Gostevie, yep. And WYG compound that particular felony by stating that they provide "solutions to projects", not even solutions to problems.

One can only hope for their customers that they are better at engineering than at verbal communication!

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MrM 3rd Sep '13 6 of 9
1

WYG - Paul Hamer and Sean Cummins presented at FinnCap in April, they're trying to get the business back towards higher margin engineering consultancy.
Some history...
http://www.building.co.uk/analysis/paul-hamer-saving-white-young-green/3135872.article

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rick 3rd Sep '13 7 of 9
1

If memory serves me WYG are the former White Young Green. The company crashed and burned after the banking collapse and the UK building industry took the full force. I had a small holding in it until forced out in 2011. For a 100% loss (wiped out equity holders if I remember correctly). Any recent share price graph does not show this total loss as I presume they must have delisted and then relisted as WYG? Needless to say I will not be investing in this outfit again.

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Beginner 4th Sep '13 8 of 9

In reply to post #76804

http://www.ulsterbusiness.com/articles/2012/09/19/wyg-agrees-deal-to-save-90-jobs-in-belfast

Of interest? A year old, but still not good, I think.

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JayRisePark 4th Sep '13 9 of 9


@UK PLC (AIM:ATUK.L),

the cloud eCommerce marketplace, is pleased to announce that Tungsten Corporation plc ("Tungsten") has signed a five year agreement to license @UK's Spend Analysis software, branded as "TungstenAnalytics", contingent upon the successful flotation of Tungsten on the AIM market of the London Stock Exchange, which Tungsten expects to take place in October 2013.

Under the terms of the license agreement, and subject to the flotation of Tungsten on the AIM market of the London Stock Exchange becoming effective, @UK will receive up front establishment fees and installation costs, together not expected to be greater than £0.5m. The total maximum value to @UK over the initial five year period is £3.4m.

Source:
http://www.londonstockexchange.com/exchange/prices-and-markets/stocks/summary/company-summary.html?fourWayKey=GB00B09Y8Y28GBGBXAIM

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 Are LON:WYG's fundamentals sound as an investment? Find out More »



About Paul Scott

Paul Scott

I trained as an accountant with a Top 5 firm, but that was so boring that I spent too much time in the 1990s being a disco bunny, and busting moves on the dancefloor, and chilling out with mates back at either my house or theirs, and having a lot of fun!Then spent 8 years as FD for a ladieswear retail chain called "Pilot", leaving on great terms in 2002 - having been a key player in growing the business 10 fold. If the truth be told, I partied pretty hard at the weekends too, so bank reconciliations on Monday mornings were more luck than judgement!! But they were always correct.I got bored with that and decided to become a professional small caps investor in 2002. I made millions, but got too cocky, and lost the lot in 2008, due to excessive gearing. A miserable, wilderness period occurred from 2008-2012.Since then, the sun has begun to shine again! I am now utterly briliant again, and immerse myself in small caps, and am a walking encyclopedia on the subject. I love writing a daily report for Stockopedia.com on most weekday mornings, constantly researching daily results & trading updates for small caps. Cheese! more »

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