An €8.8 million (£6.5 million) contract win in Turkey for frontier infrastructure outsourcer WYG (WYG) fails to woo investors this morning with the stock little changed at 127p.
Today’s contract news is the latest evidence of WYG’s buoyant pipeline. But investors look like they are still cautious on the stock after George Soros-linked investment fund Quantum Partners offloaded its remaining stake in the business on Wednesday.
‘As we reported in June, the delay in agreeing the EU’s Multiannual Financial Framework 2014-2020 had a significant impact on our order book in Turkey during 2014,’ chief executive Paul Hamer says in the announcement.
‘However, bidding activity during the first six months of this year has been at an unprecedented level and we are delighted to have secured what we expect will be the first of a number of major contracts in the coming months.’
Hamer said earlier this year WYG had ‘almost more opportunities than it can readily service directly using its existing model of organic growth, supplemented by smaller bolt-on acquisitions and partnerships’.
After initiating a strategic review and holding discussions with potential buyers of the group, WYG ultimately decided to sign up for an extended debt facility, totalling £25 million, with its bankers to fund its project pipeline.
WYG’s weak share price may be explained in part by investors mulling the October 14 exit of Soros' Quantum Partners fund, which offloaded its remaining 3 million shares.
Quantum was one of WYG’s backers when it ran into financial difficulties in 2011. The recovery has been impressive with the stock gaining more than 100% since the reorganisation – netting impressive returns for investors in its turnaround.
Quantum successfully called the top on fellow frontier outsourcing firm APR Energy (APR), a business it backed prior to its initial public offering. It sold out at over £7 a share in April 2014, versus a current market price of 148p.