Consultant WYG has warned that profit in the first half of its financial year will be well below expectations after the new chief executive uncovered previously unreported problems in the business.

Former Sweett Group chief executive Douglas McCormick joined WYG in June to replace Paul Hamer, who left to take over at Sir Robert McAlpine.

In the trading statement to shareholders this morning Mr McCormick warned WYG operating profit for the half year to September will be significantly lower than in the prior year.

Revenue for the current year is still expected to top £160 million, representing continuing year-on-year growth in line with market expectations. But Mr McCormick said the group would perform below expectation due to slow mobilisation of two major international contracts, legacy engineering projects continuing to underperform and Planning and Transport Planning practices performing below expectations.

“Having joined the business at the beginning of June and undertaken a thorough review of the budget and current trading, the board and I consider it appropriate to revise expectations as we are announcing today,” he said.

“The impact of the first quarter, largely from slow trading, together with some legacy issues make this both prudent and necessary.

“I have visited some 20 of our offices and spoken with several hundred of our staff in my first three months and I am firmly of the view that the underlying business is a sound platform from which to grow in the medium term.”

He added that the expected shortfall in performance in the first half and related working capital impacts would also impact on WYG’s net debt position at the half-year.

He said: “Together, these two factors have caused us to reduce our expectations of performance for the year as a whole.

“Looking further ahead the group remains very well-positioned in its core markets and growth prospects for the medium term remain very positive.”