Interim results Atkins

Epsom, Surrey, United Kingdom – Professional services group WS Atkins plc (Atkins) 2006-11-23 announced preliminary unaudited results for the six months ended 30 September 2006.

Highlights

  • Revenue up 17% to £605.5m;
  • Operating margins on a comparable basis improved to 5.3%* from 5.0%;
  • Profit before tax from continuing operations and continuing Joint Ventures (excluding the results of the Metronet Enterprise) up 18% to £31.3m;
  • Staff numbers up by over 1,000 since 31 March 2006
  • Substantial growth in the Middle East including the establishment of a rail business in the region; continued recovery in the UK rail market and significant organic growth in Design and Engineering Solutions
  • Work in hand strong with 88% of full year forecast revenue secured (2005: 87%);
  • Metronet Enterprise results impacted by operational issues and continued delays in the stations capital programme. Conclusions of Arbiter’s report were as expected, and we are working with all of Metronet’s stakeholders to enable Metronet to become economic and efficient overall;
  • Net funds have reduced by £41.0m from 31 March 2006 which is primarily the result of the normal seasonality of cash flows, further pension payments, growth in the business and acquisitions;
  • Interim dividend up 33% to 6.0p per share.


*Comparable operating margin restates the 2006 margins to a comparable basis to 2005 figures in respect of IAS 19 pension costs.

Commenting on the results, Keith Clarke, Chief Executive of Atkins, said:
"The Group’s wholly owned operations have had a good start to the year with profit before tax from continuing operations and continuing Joint Ventures excluding the Metronet Enterprise up by 18%. Revenue has grown by 17% to £605.5m driven by substantial growth in the Middle East following the establishment of a rail business in the region; strong organic growth in Design and Engineering Solutions and the continued recovery in the UK rail market, where we have won a number of significant signalling contracts.

Much of this growth has been driven by a significant increase in headcount, with staff numbers up by more than 1,000 in the first six months of this financial year. This headcount increase has been across the Group, but particularly in the Middle East, as we continue to develop our strong multi-national presence.

The Metronet Enterprise continues to impact the Group¿s results and has contributed a £1.4m reduction in profit before tax compared to the same period last year.

The conclusion in the Arbiter’s recent report that Metronet was not performing in an economic and efficient manner, was as expected. Whilst some improvements have been made, much still remains to be done to enable Metronet to achieve its goal of being economic and efficient overall at the end of the first review period in September 2010.

The markets in which we operate, continue to provide good prospects and we are confident that our wholly owned operations will continue to grow. Our work in hand remains strong with 88% of forecast year end revenue secured (2005: 87%).

The recovery in the performance of the Metronet Enterprise remains crucial to its eventual success and the realisation of Atkins’ returns. We are working with all of Metronet’s stakeholders to review the current arrangements to improve the efficiency and effectiveness of delivery."

Atkins
Atkins plans, designs and enables the delivery of complex infrastructure and buildings for clients in the public and private sectors across the world. Atkins is the largest multi-disciplinary consultancy in Europe; the largest engineering consultancy in the UK; and the third largest design firm in the world (sources: New Civil Engineer Consultants File, 2006; Swedish Federation of Consultant Engineers & Architects, 2005; Engineering News Record, 2006).

The Overview of the period, Business review, Finance review, the unaudited consolidated income statement, consolidated balance sheet, consolidated statement of recognised income and expense, consolidated cash flow statement and notes to the financial information for the period can be viewed at www.atkinsglobal.com

OVERVIEW
Results
The Group’s wholly owned operations have had a good start to the year with profit before tax from continuing operations and continuing Joint Ventures excluding the Metronet Enterprise up by 18%. Revenue has grown by 17% to £605.5m driven by substantial growth in the Middle East following the establishment of a rail business in the region; strong organic growth in Design and Engineering Solutions and the continued recovery in the UK rail market, where we have won a number of significant signalling contracts.

Much of this growth has been driven by a substantial increase in headcount, with staff numbers up by more than 1,000 in the first six months of this financial year. This headcount increase was across the Group, but particularly in the Middle East, as we continue to develop our strong multi-national presence.

The current service cost of defined benefit pension schemes has increased by £2.3m due to a reduction in discount rates compared to 1 April 2005, although the total pension charge including net finance costs remains unchanged at £12.5m. This change reduces the Group¿s operating margins by 0.4% but has no impact upon the Group¿s overall profitability. On a comparable basis, operating margins have increased to 5.3% from 5.0%.

The Metronet Enterprise continues to impact the Group’s results and has contributed a £1.4m reduction in profit before tax compared to the same period last year.

The conclusion in the Arbiter¿s recent report that Metronet was not performing in an economic and efficient manner, was as expected. Whilst some improvements have been made, much still remains to be done to enable Metronet to achieve its goal of being economic and efficient overall at the end of the first review period in September 2010.

Outlook
The markets in which we operate, continue to provide good prospects and we are confident that our wholly owned operations will continue to grow. Our work in hand remains strong with 88% of forecast year end revenue secured (2005: 87%).

The recovery in the performance of the Metronet Enterprise remains crucial to its eventual success and the realisation of Atkins’ returns. We are working with all of Metronet’s stakeholders to review the current arrangements to improve the efficiency and effectiveness of delivery overall.

Board of Directors
On 6 September 2006, Christopher Kemball informed the Board that he will step down as a Director on 31 December 2006. We would like to thank him for his valuable contribution to the Group over the last four years.

Dividend
In view of the Board’s continuing confidence in the Group’s outlook, and to restore the historic relationship between the level of interim and final dividends, an interim dividend of 6.0p per share will be paid on 26 January 2007 to all shareholders on the register on 15 December 2006 (2005 interim dividend: 4.5p per share).

Auteur: Redactie Infrasite

Bron: Atkins (Head Office)