British Projects Lift Profit at WS Atkins

on Jun 14, 2013

UK-based engineering and design consultancy WS Atkins (LON:ATK) yesterday, June 13 posted results for the year ended March 31. Reflecting the group’s mixed performance across its regional segments, the Atkins share price was volatile throughout the day and ended 1.1 percent below the previous day’s closing level. This morning the stock has gained 1.10 percent to 922.50p by 08:26 GMT. It has risen by more than 20 percent so far this year.

**Domestic Growth**
The group said in a statement that its British arm had made an operating profit of £57 million in the year ended March 31, up from £52 million the previous year. It also reported a rise in revenue to £900 million, up
from £860 million.
The FTSE 250-listed firm said its work in the rail and, defence and aerospace had all been “strong”. “We are seeing good opportunities in UK infrastructure markets as the UK government seeks to stimulate the economy with its commitment to infrastructure spend and through rail and water regulatory spend,” Atkins said in its market update.

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The engineering consultancy, which designed Oxford Circus’s diagonal crossing, is advising on the Government’s HS2 super-fast rail line between London and Birmingham. It is a consultant to the Mayor of London on his “Boris Island” airport plan in the Thames, while having advisory roles to Heathrow, Gatwick and Stansted about how they might grow. Atkins is also working on the £15 billion Crossrail scheme in London and is a contractor on the £4.2 billion Thames Water super-sewer.

Even in Atkins’s dedicated energy industry business, it was British projects that prompted a 21 percent profit rise in that division. The group is advising the former coal-fired power stations of Drax and Eggborough on their conversion to biomass and has other clean-energy consultative projects with the Department of Energy and Climate Change.
**Disappointing Performance in the Middle East and the US**

Britain has made up for rather disappointing performance in Atkins’s Middle East and US businesses, where profits fell 29 percent and 27 percent, respectively. The engineering consultancy reported underlying pre-tax profit for the year to the end of March of £104.5 million, up 2.9 percent. Yet, revenue and underlying operating margins were both down slightly on last year at £1.7 billion and 6.4 percent respectively, with Atkins’ operations in the US and the Middle East being the most significant drag.

!m[WS Atkins (LON:ATK) ](/uploads/story/3067/thumbs/pic1_inline.jpg)
The company’s Asia Pacific and Europe region showed a 16 percent rise in operating profit to £14 million despite and a 0.8 percent increase in revenue to £165 million. Atkins said it planned to continue to expand its work in China and Hong Kong to maintain growth in the region.
The engineering consultancy said it remained optimistic about its overall growth prospects. “We are confident we will achieve further underlying growth in the year ahead,” it said.


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