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 拢70.6m to 拢91.5m at the end of 2008.

At the announcement of its results for the six months to 31 December 2008, the company said: 鈥淭he group's lenders have been informed of these circumstances and discussions with them regarding a remedy of a potential breach have commenced.鈥�

Its share price fell 34% to 31p following the news.

Turnover in the period rose 8% from 拢134.1m to 拢144.5m but the company made a loss of 拢2.1m due to exceptional items of 拢11.1m. Bad debt accounted for 拢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: 鈥淭he 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.鈥�

Breakdown by division:

Engineering

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

Management services

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

Environment, planning and transport

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

Ireland

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

International

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

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