Final Results

Results for the year ended 31 March 2015

Good results and continued progress towards our 8% margin goal

Design, engineering and project management consultancy WS Atkins plc (Atkins) today announces its preliminary results for the year ended 31 March 2015.

RESULTS SUMMARY

"We have delivered good results with solid growth in profitability and excellent cash performance. Margin progression has continued towards our 8% goal and the outlook remains positive."

Notes to editors

1. Atkins

Atkins (www.atkinsglobal.com) is one of the world's most respected design, engineering and project management consultancies, employing some 18,000 people across the UK, North America, Middle East, Asia Pacific and Europe. We build long term trusted partnerships to create a world where lives are enriched through the implementation of our ideas. You can view Atkins' recent projects on our website.

2. Attachments

Attached to this news release are the overview of the year, extracts from the business review, the consolidated income statement, consolidated statement of comprehensive income, consolidated balance sheet, consolidated cash flow statement, consolidated statement of changes in equity and notes to the preliminary financial information for the year.

3. Analyst Presentation

A presentation for analysts will be held today at the London Stock Exchange at 0830. Dial-in details are available from +44 1372753165 for those wishing to join the presentation by conference call. A webcast of the presentation will be available via the Company's website, www.atkinsglobal.com.

4. Cautionary Statement

This announcement has been prepared for the shareholders of Atkins as a whole and its sole purpose and use is to assist shareholders to exercise their governance rights. In particular, this announcement has not been audited or otherwise independently verified and no warranty is given as to its accuracy or completeness (other than any such warranty which is mandatorily implied by statute). Atkins and its directors and employees are not responsible for any other purpose or use or to any other person in relation to this announcement and their responsibility to shareholders shall be limited to that which is imposed by statute.

This announcement contains indications of likely future developments and other forward looking statements that are subject to risk factors associated with, among other things, the economic and business circumstances occurring from time to time in the countries, sectors and business segments in which the Group operates. These and other factors could adversely affect the Group's results, strategy and prospects. Forward looking statements involve risks, uncertainties and assumptions. They relate to events and/or depend on circumstances in the future which could cause actual results and outcomes to differ materially from those currently expected. No obligation is assumed to update any forward looking statements, whether as a result of new information, future events or otherwise.

OVERVIEW OF THE YEAR

We are pleased to report that the Group delivered another set of good results against a background of continued challenges in the broader macroeconomic environment. During the year, we made further progress on the delivery of our strategy and margin progression continued towards our 8% margin goal.

Our operational excellence programme is delivering efficiencies, particularly in North America. In addition, on 1 April 2015 we reorganised our UK business to enhance our client focus, improve efficiency and drive business performance.

We also completed a number of strategic acquisitions in Europe and North America. In September 2014, we received approval from the US Government which facilitated the successful completion of our acquisition of Nuclear Safety Associates (NSA). This acquisition will enhance the capability of our Energy business, and extend our nuclear footprint in North America in the federal and commercial US nuclear industries. In October 2014, we acquired Houston Offshore Engineering (HOE) a leading offshore oil and gas business based in Houston, Texas. This business brings to the Group vast experience in the design of offshore deep water floating production platforms. Our acquisition of Terramar, one of Norway's leading project management consultancy firms, was also completed during the third quarter.

In September 2014, we completed the disposal of our 77 person business in Poland to Multiconsult, a Norwegian multidisciplinary consultancy and design business, and we intend to exit the Portuguese market where we currently employ 48 staff.

Our underlying profit before tax was £121.9m, an increase of 14.6% over last year's profit of £106.4m, on revenue that increased by 0.4% to £1.76bn (2014: £1.75bn). This profit includes the benefit of £5.0m of research and development expenditure credit following early adoption of new rules in the UK. In previous years the equivalent benefit was shown as a reduction in the Group's tax charge.

We believe underlying profit is a more representative measure of performance, removing the items that may give a distorted view of performance. In the current year we have removed net profits on disposals and costs associated with disposals of £0.4m (2014: £10.5m), amortisation of acquired intangible assets of £6.9m (2014: £2.7m), exceptional transaction costs of £4.4m (2014: £nil), impairment of goodwill of £2.8m (2014: £nil) and deferred acquisition payments of £1.5m (2014: £nil). The unadjusted reported profit before tax was £106.7m (2014: £114.2m).

Revenue and profit before tax were adversely affected by currency headwinds of £22.8m and £1.1m respectively against a constant currency basis.

Reported operating profit was £118.5m (2014: £113.7m), at a margin of 6.7% (2014: 6.5%). As we state above, we believe a more representative measure of operating profit adds back amortisation of acquired intangible assets of £6.9m (2014: £2.7m), exceptional transaction costs of £4.4m (2014: £nil), impairment of goodwill of £2.8m (2014: £nil) and deferred acquisition payments of £1.5m (2014: £nil).

This shows a more representative underlying operating profit of £134.1m (2014: £116.4m), at an improved underlying margin of 7.6% (2014: 6.7%).

The net profit on disposal of £0.4m is explained in more detail in note 6 and comprises £0.5m of deferred consideration received in relation to our previously disposed UK highways services business and a loss of £0.1m on the disposal of our Polish business.

Underlying diluted EPS increased 11.4p per share to 97.1p (2014: 85.7p), an increase of 13.3%.

The Group pension schemes have seen an overall actuarial gain of £6.0m over the year, with the net liability reducing to £297.0m. This is due to a combination of increased liability losses of £237.2m, as a consequence of changes in economic assumptions, being more than offset by asset gains over the year of £243.2m. The fair value of plan assets has increased to £1,528.8m (2014: £1,236.3m) and the liabilities have increased to £1,827.2m (2014: £1,560.5m).

Operating cash flow in the year was £133.9m (2014: £95.5m), representing 99.8% (2014: 82.0%) of underlying operating profit. The Group's liquidity remains strong with closing net funds of £179.3m (2014: £188.3m).

Headcount closed the year at 18,462 (2014: 17,489), reflecting organic headcount growth and the acquisitions of NSA, HOE and Terramar.

Our United Kingdom and Europe business saw a much improved second half performance after a mixed first half. We faced a market downturn in our aerospace business in the year and our profitability was also affected by a number of contract variation negotiations in our UK rail business, which have now been largely resolved. By contrast, our highways and transportation and design and engineering businesses continued to benefit from the UK Government's focus on infrastructure investment. Our highways and transportation business won significant contracts for Highways England as one of its key suppliers on the Collaborative Delivery Framework and also for the Welsh Government's M4 corridor project and Transport Scotland's A9 upgrade. All sectors of our design and engineering business have strong pipelines of secured workload and opportunities. Our rail business remains busy, operating at a high level of staff utilisation, reflecting strong markets in the areas of signalling, electrification and station design. Our water and environment business returned to growth during the second half of the year. This improved performance was due to increased volumes from contracts secured with water utility clients for the 2015 to 2020 regulatory period (AMP6). Our Faithful+Gould business has performed well with continued signs of recovery in the market.

In Scandinavia, we continue to work across a number of major rail and road infrastructure projects. We believe that the strategic acquisition of Terramar will position us to secure further work in the well-funded infrastructure markets in Norway, as well as unlocking further project management opportunities.

Our business in North America, saw an improvement in both operating profit and margin as we embedded our new operating structure, despite a first half impacted by currency headwinds. Our consultancy business's more focused, client-centric operating model made solid progress, increasing win rates and positioning the business to maximise existing relationships and create new opportunities. We benefited from good new contract wins in the environmental and general engineering services areas of our business in Florida, Nevada and Colorado, and were reappointed on significant contracts for the Federal Emergency Management Agency as well as contracts to oversee transport solutions for highways authorities in Florida, Texas and Georgia. Our strategic ventures business completed its first year of operation with a diverse portfolio of rail, transit and energy and renewables clients. Faithful+Gould had a quieter year following the conclusion of some client programmes and we were impacted by cost reduction measures taken by clients in the oil and gas sector.

In the Middle East, our business delivered a strong overall performance, with revenue and operating profit up significantly as we continued our focus on major projects and programmes in rail, infrastructure and property. Good progress was made on the mobilisation and design delivery for our major metro projects, including Riyadh Metro, Doha Metro Red Line South and Doha Metro Gold Line, the latter a notable win in the first half of the year. There continues to be demand for metro projects across the region, with further opportunities to work selectively for design and build contractors. Our work with the Qatari Government, advising on infrastructure planning and design projects to meet its National Vision 2030, has continued through the year. Property sector activity in the United Arab Emirates experienced an upturn in confidence in 2014 resulting in increased property workloads with selective clients. Our Faithful+Gould business had a strong year with growth across the region buoyed by the Confluence acquisition in 2013, which added project management strength. We have also seen a number of successes in the property sector.

Our Asia Pacific business had a good year, particularly in our core markets of Hong Kong and China, despite the Government's introduction of anti-corruption measures and the subsequent slowdown in contract awards in mainland China, and the impact of pro-democracy demonstrations in Hong Kong. Our work outside the region with Chinese contractors continued to gain momentum. We remain focused on expanding our footprint in southeast Asia. In Indonesia we won a substantial masterplanning project and in Malaysia and Vietnam we continue to pursue projects selectively in the transport and property sectors. The acquisition of Confluence, through our Faithful+Gould business in the region, has enabled us to achieve particular success in Singapore on several high profile projects in more diverse sectors and strengthened our multidisciplinary offering to clients.

And finally, our Energy business continued to perform well despite the effect of the falling oil price. During the year, we were delighted to complete two acquisitions in North America. In October, the successful acquisition of HOE added 150 people in North America with world class skills in deepwater floating platforms, while the completion of the NSA purchase added 130 specialists in nuclear safety, design engineering, and professional security services. Our expertise and international footprint has helped us secure long-term framework agreements for both consultancy and design services for major international oil and gas operators and our international nuclear portfolio remains strong. The Middle East market continues to provide opportunities for growth with a strong pipeline of work, including the recent award of a contract to provide engineering services to Shanghai Electric Power Construction Corporation in support of Aramco.

People

We continue to maintain our focus on inspiring and encouraging more young people to pursue a career in the engineering sector. During the year, we welcomed almost 400 new graduates across the Group and accelerated our apprentice programme by recruiting over 70 apprentices within our UK business.

A more diverse workforce can help to address the critical skill shortage in parts of our business and our commitment to building a more diverse organisation continues to gain momentum. We have increased the number of our women's professional networks around the world and our flexible working practices have been introduced across our Energy business and in our global design centres. Our Energy business is also piloting a programme to support women returning to work after maternity leave. In the UK, we were delighted to be recognised as one of The Times Top 50 Employers for Women 2015.

During the year, we invested in our brand to create a new purpose statement to capture the 'what', 'how' and 'why' of Atkins. Rather than simply what we do, we want to be known for what we stand for, the things that drive us, and the way we work. Our purpose brings all that together in one description.

Dividend

The Board is recommending a final dividend of 25.5p per ordinary share in respect of the year ended 31 March 2015, making the total dividend for the year 36.5p (2014: 33.75p), an increase of 8.1%. If approved at the Company's annual general meeting, the dividend will be paid on 21 August 2015 to ordinary shareholders on the register on 10 July 2015.

Outlook

The Group has maintained its resilience to challenging markets worldwide through the breadth and depth of its market positioning. 2015 continues to see a heightened level of uncertainty in world markets with the consensus of forecasts of world economic growth between 2.8% and 3.8% overall, but with significant regional variations. Sustained low oil prices and economic and political uncertainties provide a complex backdrop to near-term developments.

In the UK, we are encouraged by the continuing overall commitment by the recently elected Government to infrastructure and the National Infrastructure Plan and we believe our refreshed operating model positions us well to take full advantage of this. In North America, as our technical professional organisation matures, we expect productivity will continue to increase and help drive further margin improvement. In Energy, we see a good pipeline of work across nuclear and renewable, balancing ongoing staff reductions in oil and gas. In the Middle East economies, the reduction in oil prices may have some near-term impacts on decision making and the launch of major capital spending commitments. However we believe essential infrastructure will remain a priority and the long-term objectives of governments in core markets are unlikely to be diverted significantly. Asia Pacific remains well placed to deliver on its strategic growth plan, helped by the acquisition of Confluence in 2013. Overall, the outlook remains positive.

Business review

Segmental performance

United Kingdom and Europe

PERFORMANCE

Our United Kingdom and Europe business delivered a much improved second half performance after a mixed first half. Full year revenue decreased 9.5% to £903.8m, reflecting the sale of our highways services business last financial year and our Polish business in 2014, a market downturn in aerospace and difficult trading conditions in Scandinavia and Portugal.

On an ongoing basis, excluding disposals and changes to joint venture reporting, revenue actually increased by 2.7% driven primarily by the UK where we have seen good momentum in our core markets, which continue to be well-funded.

The operating margins at 6.7% includes the benefit of research and development expenditure credit (RDEC) following early adoption of new rules in the UK. In previous years the equivalent benefit was shown as a reduction in the tax charge. On a comparative basis excluding the effects of RDEC, the disposals and changes to joint venture reporting give a margin of 6.0%.

We successfully completed the acquisition of Terramar, one of Norway's leading project management consultancy firms, during the third quarter. Our strategy of portfolio optimisation also continued with the disposal of our Polish business to Multiconsult, a Norwegian consultancy and design business, in September 2014.

Closing staff numbers rose by 1% to 9,642, with growth driven by our rail, design and engineering and highways and transportation businesses as well as the acquisition of the 65 person Terramar business. This was partially offset by the sale of our Polish business and the rightsizing of our aerospace business.

BUSINESS MODEL

Our focus is on the planning, design and enabling of our clients' capital programmes and projects in and around infrastructure, as well as providing engineering consultancy services to wider markets. We are a technical consultancy, providing advice, design and engineering together with project management skills for public and private sector clients. Our multidisciplinary skills allow us to draw on expertise from across the business, including our resource pool of professional technical staff in India, to deliver complex projects and to support other Group businesses with specialist expertise.

As we continue to progress our operational excellence programme, we have recently announced a reorganisation and rationalisation of our UK operations into four market facing divisions, which took effect on 1 April 2015. The new organisation structure is designed to maximise our core technical skills and bring people together into new market, business development and project delivery teams to support competitive bidding and focus on delivering projects effectively. Overall, we believe these changes will make it easier for us to collaborate and share ideas internally, allowing us to provide our clients with greater innovation and a broader range of expertise, together with best use of technology and resources. We expect the reorganisation to deliver year on year margin progress in a stable market.

STRATEGY

Our strategy focuses on maintaining our market leadership positions in the UK and realising the opportunities arising from the UK Government's commitment to stimulate the economy through infrastructure investment and from regulatory spend in rail, utilities and airports. Our defence, security and aerospace markets provide good diversity to our infrastructure exposure. We intend to exit the Portuguese market, where we currently employ 48 staff.

Our operational excellence programme continues to improve the underlying processes of the business, ensuring increased time to focus on our clients' needs and project delivery.

Our ability to leverage skills and capability from a variety of industry sectors and professional disciplines provides a strong selling proposition to our clients. We see multiple opportunities for our broad multidisciplinary offering, providing good growth potential.

BUSINESS DRIVERS

The economic environment significantly affects the opportunities available to our business and the UK Government's recognition of infrastructure as a core enabler of growth provides a positive stimulus. Our diversified portfolio provides resilience to market fluctuations, as does the fact that a number of our markets remain well-funded.

Scandinavian markets continue to benefit from investment in infrastructure from the public and private sectors, providing stable, well-funded market conditions.

Added resilience is brought to our UK business by its ongoing support for projects in other regions, together with the use of our global design centres in India, which provide flexibility of delivery and access to high quality, lower cost resources.

Our market leadership position in the UK is underpinned by the technical excellence of our people and the quality of their work. For example, we were delighted to be shortlisted for four awards at the 2015 MCA (Management Consultancies Association) awards.

PEOPLE

Excluding the people who transferred with the sale of our Polish business, our United Kingdom and Europe headcount increased very slightly during the year. Staff turnover increased to 11.9% from 9.5% as market conditions continued to improve.

In the UK, we continue to implement programmes to assist with the attraction, engagement and retention of talented people and to be recognised by a number of independent organisations as a great place to work. In The Sunday Times 25 Best Big Companies to Work For we rose from 18th to 16th place and we appeared in the top 25 for the ninth time in 11 years. We are one of the largest and most popular recruiters of newly graduated engineers and were shortlisted for the TARGETjobs most popular graduate recruiter in the construction, civil engineering and surveying sector in 2015. In Denmark, as part of Engineer the Future, we collaborate with a number of organisations, institutions and companies to encourage many more people to choose a career in technology development.

The ongoing promotion of science, technology, engineering and mathematics (STEM) careers to young people continues to be a focus. Our eight STEM hubs in the UK enable a more coordinated approach to STEM activity with schools, colleges and community groups.

During 2014, 364 young people joined the UK business on formal education and development programmes including 71 apprentices.

Atkins is a founder member of the 5% Club. As at 31 March 2015, 8.9% of our UK staff were on a formalised apprentice, sponsored student or graduate programme.

We are focused on increasing the proportion of female employees and have developed a range of flexible working options to help us both recruit and retain staff. During the year, the proportion of females in the UK increased slightly to 25% and we were recognised as one of The Times Top 50 Employers for Women 2015.

In line with the rest of the Group, we measure employee engagement through our Viewpoint employee opinion survey. In the UK, our results in 2014 showed a slight decrease compared with the previous year reflecting changes in the business and some of our markets. In Europe, the result was unchanged. Both results continued to outperform the global norm for the professional services sector.

SAFETY AND SUSTAINABILITY

Workplace health, safety and wellbeing continue to be a high priority. The overall AIR has improved this year, primarily as a result of the sale of our highways services business and the introduction of proactive measures such as the Atkins operating safely system.

We won Engineering Practice of the Year at the Irish Building and Design Awards for our approach to sustainability and innovation, our commitment to training, and the depth and breadth of our projects.

We have formalised a volunteering policy commitment in the UK. These volunteer days have mainly been used to support charity organisations such as RedR and Engineers without Borders.

RISK

We recognise that there is a risk in the medium- and longer-term of a shortage of professional technical staff in our industry. To help address this, we commissioned a study, The skills deficit: consequences and opportunities for UK infrastructure. We have outlined in the People section of the Group's Annual Report our approach to recruiting apprentices and sponsoring students and graduates to help mitigate this risk.

The majority of the Group's post-employment benefit liability sits within the UK business and is comprised of defined benefit pension obligations, the largest of which is within the Atkins Pension Plan, which is closed to the future accrual of benefits (see note 12 for more detail).

The pension obligations are recognised as a risk due to their size and the fact that the ongoing liability is a function of a number of assumptions, not least the life expectancy of members. This risk is mitigated by ongoing cash contributions to the pension fund, which have been agreed with the pension trustees, along with measures to manage ongoing volatility.

We identify, review and assess risks across all our businesses and the process is explained in more detail in the Principal risks and uncertainties section of the Group's Annual Report.

OUTLOOK

The outlook for our United Kingdom and Europe business as a whole is stable, despite a slowdown in our aerospace business.

In the UK, the infrastructure markets continue to present opportunities for our broad multidisciplinary offering as the UK Government stimulates the economy with its commitment to infrastructure spend. We believe our refreshed operating model is well placed to address this need. Our Faithful+Gould business enters the new financial year with its diverse portfolio providing an order book that is comfortably ahead of last year.

Notwithstanding the current competitive landscape in Scandinavia, our core markets remain well-funded, with a good pipeline of infrastructure projects, supported by government commitments.

Our secured work in hand in the United Kingdom and Europe is 45.3% (2014: 49.2%) of next year's budgeted revenue and, with our reorganisation in place, this gives us confidence for the year ahead.

United Kingdom

PERFORMANCE

Our UK business has seen headline revenue reduce by 9.4% to £835.6m (2014: £922.0m) and headcount growth of 0.9%. Excluding disposals and the change in the accounting treatment of joint ventures gives a more representative increase in revenue of 2.7%.

The full year operating margin was 7.1% (2014: 6.3%). Operating profit includes RDEC and joint venture reporting changes, excluding these gives an operating margin of 6.4% (2014: 7.2%).

Our aerospace business faced a market downturn in the year and profitability was further impacted by a number of outstanding contract variation negotiations in our UK rail business, which have now been largely resolved. During the first half, we also rightsized our water and environment business. By contrast, our highways and transportation and design and engineering businesses continue to benefit from the UK Government's maintained focus on infrastructure investment, and performed strongly during the year.

OPERATIONS

Rail

Our rail business remained busy, operating at a high level of staff utilisation, reflecting strong markets in the areas of signalling, electrification and station design. As a result our headcount continued to grow steadily during the year.

Work continued on signalling projects awarded under the two major frameworks for the Sussex/Wessex and Kent/Anglia areas, including East Sussex that was completed successfully in February 2015 and a major resignalling project in east Kent. This was in addition to ongoing work on our other non-framework signalling contracts at Cardiff and Wolverhampton.

In partnership with Network Rail, Laing O'Rourke and VolkerRail, we are jointly delivering the Stafford area improvement programme, and continue to support the delivery of a number of other technically challenging projects for Network Rail, including the transformation of Birmingham New Street station, which will open in September 2015.

The UK's electrification programme presents a substantial opportunity for our rail business. In partnership with Parsons Brinckerhoff, we are the lead design organisation for the electrification of the Great Western main line between London and South Wales. We are also working with Carillion Power Lines to deliver the Midland Mainline electrification programme.

Following our involvement in early stage design for phase one of High Speed 2 between London and the West Midlands, we believe we are well placed to win further opportunities in phase two.

Our overall financial performance was adversely impacted by a number of outstanding contract variation negotiations. We have reached resolution on the large majority of these contracts which, as previously indicated, impacted positively on our regional cash performance at the end of the period.

Highways and transportation

Our highways and transportation business focuses on three core areas: strategic advice, design consultancy and asset management. In addition, we provide operational maintenance and design for the M25, London's orbital motorway, as part of our role within the M25 Connect Plus consortium.

In November 2014, Highways England appointed Atkins as one of its key suppliers on the Collaborative Delivery Framework (CDF). The CDF will deliver important upgrades to motorways and trunk roads across England over the next four years. Atkins will provide design and engineering expertise for upcoming programmes including major improvements. Among the projects in the CDF pipeline are the A14 trunk road between Cambridge and Huntingdon and a programme of smart motorway schemes. 

In 2014, we were appointed to provide design development expertise to the Welsh Government's M4 corridor project around Newport working with design partners Arup and RPS. The proposals include the development of 24km of new motorway and a 2.5km long viaduct crossing of the river Usk, as well as major remodelling of M4 junctions 23 and 29.

In a joint venture with Mouchel, we have been awarded the design contract for the third stage of Transport Scotland's ambitious programme to upgrade a 177km stretch of the A9 between the cities of Perth and Inverness to full dual carriageway standard by 2025. We will provide multidisciplinary design work for the 50km stretch of road between Dalraddy and Inverness.

We were also appointed in collaboration with CH2M as designer for the Aberdeen western peripheral route/Balmedie to Tipperty. The contract will include the design and construction of 58km of new dual carriageway as well as new side roads, access tracks and more than 100 new structures, including two significant focal point bridges over the rivers Dee and Don.

Water and environment

Our water and environment business returned to growth during the second half of the year. This improved performance was due to increased volumes from contracts secured with water utility clients in the prior year, including Thames Water and Severn Trent Water, delivering their programmes for the 2015 to 2020 regulatory period (AMP6).

We have bid successfully for similar collaborative opportunities with other water companies and secured frameworks with United Utilities, Southern Water and are one of two selected consultants for Wessex Water, giving us confidence in continuity of workload for our water engineering team in AMP6.

Our work in sustainable development continues to grow, evidenced by recent commissions for significant land developments which we are leading in South Africa and Morocco, as well as additional sites for the development sector in the UK.

During the year, the business undertook work on key UK infrastructure projects including Crossrail and High Speed 2, and recent awards on major highways and rail projects are drawing on our specialist environmental and ground engineering teams.

Faithful+Gould

Our UK business has performed well with continued signs of recovery in our market. The Scape Asset Management, Surveying and Design Services public sector framework has provided a steady stream of work, particularly in education. Wins include appointments at the universities of York, Edinburgh, Loughborough and Wolverhampton and for Kent county and Leicester city councils. The London and southeast commercial property sector is improving and we have been appointed to work for Solum Regeneration at London Bridge and Walthamstow, and Argent at Paradise Circus, Birmingham and Kings Cross, where we have been appointed on the development of block R7, a new 13,000 square metre office space set over 12 floors.

Our market position in the nuclear sector continues to grow. We have been appointed by Capenhurst Nuclear Services as the programme management office to deliver its new process plant, the Legacy Cylinder Facility.

In Scotland, we have been appointed to provide project management and multidisciplinary design services on Cockenzie Marine Park, an old power station site being redeveloped into flexible large scale manufacturing facilities, and for EDI Group in its redevelopment of the Fountainbridge site in Edinburgh.

Design and engineering

Our design and engineering business has performed well during the year. The business serves customers across five key market segments: education, airports, defence, transportation and mixed use development. All sectors have strong pipelines of secured workloads and opportunities. The division also works closely with the Group's Energy business to deliver the buildings and infrastructure elements of major UK projects.

In the education sector, we successfully won the design contract to work with Laing O'Rourke on the Priority Schools Building Programme in Yorkshire. We will continue to focus on higher and further education opportunities going forward.

Our airports team continues to win and deliver significant programmes of work at both London Gatwick and Heathrow.

Our defence infrastructure portfolio includes major programmes of work for BAE Systems, designing facilities for air and sea-based defence.

In January, the business was appointed by Transport for London as part of one of the major consulting groups developing the detailed plans for Crossrail 2. It is also supporting the Middle East business on the Doha Metro Gold Line project.

We continue to support London Legacy Development Corporation on the transformation of Queen Elizabeth Olympic Park.

We have also supported initial nuclear new build infrastructure work in the UK, including EDF Energy's new Hinckley Point reactor, and remain heavily involved in nuclear decommissioning work, including a role on the Silos Direct-encapsulation Plant project at Sellafield. We are the client's engineer on Tidal Lagoon Swansea Bay, creating the world's first man made, energy-generating lagoon.

Defence, aerospace and communications

Overall our defence, aerospace and communications business experienced a difficult year.

Our aerospace business was impacted by a significant market downturn as our major client, Airbus, moved from design to production on a number of its programmes. We reduced the number of people engaged on aerospace projects in both the UK and India, with the majority of those affected successfully redeployed into growth areas of the business, including defence and energy. We are focused on developing our relationships with other aerospace partners and the business is now stable.

We are well positioned in defence where discussions with front line commands secured important contract wins and we are encouraged by further pipeline opportunities.

Management consulting

Our management consultancy business provides the UK Government and various industry clients with practical capability to run the full lifecycle of technology enabled change programmes.

We continue to deliver security work for central government, as well as supporting Heathrow Airport's IT outsourcing contract in partnership with Capgemini, leveraging our position in aviation.

We have established a strong capability in holistic security and this team is delivering a range of high profile projects, including a number of cyber security assignments for multinational private sector clients.

Europe

PERFORMANCE

Our Europe business is primarily focused on the rail and highways infrastructure markets in Scandinavia, with smaller operations in Portugal and Ireland.

Headline revenue reduced by 10.6% to £68.2m reflecting the sale of our Polish operation and an increasingly competitive market in Scandinavia. Margins decreased to 1.9% (2014: 5.9%) reflecting losses in our Polish and Portuguese businesses and workload issues in Sweden.

Headcount rose to 757 (2014: 734), with the disposal of our Polish operation in September 2014 being offset by the acquisition of Terramar in Norway.

OPERATIONS

In Denmark, we continue to work across a number of key rail and road infrastructure projects, including the new railway line between Copenhagen and Ringsted and the European Rail Traffic Management System signalling programme. Atkins' teams of specialists are collaborating with the client and suppliers in a joint team to ensure a successful implementation of the project, which is currently in the design phase.

We have maintained a good order book through the year. The Danish Government has announced a major programme of investment in rail infrastructure and rolling stock, and we believe we are well positioned to benefit from this.

In Sweden, we successfully bid with our partners on the Molnby Depot and Gothenburg-Borås High Speed Line contracts which will generate good work for us. Bidding activity remains high as a series of projects come to market. We are also working on a number of other significant infrastructure projects, such as the Hallsberg double tracking project and the Mälarbanan rail systems project for the state transport authority, Trafikverket. The market outlook, and medium-term pipeline and order book, remain good.

We are focused on expanding our position in the Norwegian infrastructure and project management markets. We believe that the strategic acquisition of Terramar will position us to secure further work in the well-funded infrastructure markets in Norway, as well as unlocking further project management opportunities.

We made further progress on our portfolio optimisation strategy, with the sale of our 77 person business in Poland to Multiconsult which completed in September 2014.

Our operations have stabilised in Ireland and showed some modest growth through the year with headcount increasing for the first time since 2008 on the back of some good wins in the water and highways sectors. In Portugal, the continuing difficult economic conditions will curtail any meaningful growth in the medium term and we intend to exit the Portuguese market, where we currently employ 48 staff.

North America

PERFORMANCE

Our North America business, which consists of our consultancy and Faithful+Gould businesses, saw a 4.7% increase in operating profit over last year, to £20.0m (2014: £19.1m) at an improved margin of 5.9% (2014: 5.0%). Revenue was down 10.4%, reflecting first half currency headwinds, and a change in the Group's accounting for joint ventures. Excluding these effects, together with the impact of the prior year disposal of Peter Brown, revenue was down 3.8%. Our consultancy business delivered revenue of £274.5m (2014: £305.3m) and operating profit of £18.1m (2014: £17.4m), at an improved margin of6.6% (2014: 5.7%).

Faithful+Gould had a more challenging year, delivering operating profit of £1.9m (2014: £4.9m). Results were adversely affected by bad weather on the East Coast and industrial action across some of the oil and chemical sites on which we work, both of which impacted our delivery capability.

In the prior year we disposed of our Peter Brown business which contributed a loss in the period to March 2014 of £3.2m and revenue of £6.8m.

During the year, our consultancy business established a new, more focused, client-centric operating model, which made solid progress, increasing win rates and positioning the business to capitalise better on existing and new market opportunities. Our focus on implementing and embedding our operational excellence programme contributed to our improved margin.

Average staff numbers reduced by 5.9% as a result of the implementation of our new operating model and reduced oil and gas workloads for Faithful+Gould.

BUSINESS MODEL

Our new consultancy operating model established five client-focused businesses supported by a technical professional organisation (TPO) to ensure the best people are assigned to the work quickly and efficiently, irrespective of staff location.

The five client facing businesses consist of transportation, public and private, federal, aviation and strategic ventures, which includes areas such as rail, energy, technology and future-proofing cities. The model is now established and proving successful in aligning with our clients' needs.

The TPO is gaining momentum and focusing on recruiting, retaining and developing world class technical professionals in our industry. This supports our objective of providing new and innovative technical and business solutions to our clients, resulting in broader, deeper client relationships and the opportunity to work on their largest and most complex projects.

Our operational excellence programme is also focused on centralising, simplifying and streamlining the management and administration of key shared services. We believe that the efforts to streamline these areas will yield structural cost reductions in the medium term.

STRATEGY

We will continue to focus on growing our business by concentrating on excellent project delivery and client service, expanding our services and focusing on securing larger, longer-term projects. As a result of our shift in focus last year, we increased our win rate and on average won larger contracts. In particular, we increased the number of clients delivering more than $5m of business per year, while reducing the number of clients delivering less than $0.1m per year.

We are shifting our focus to major infrastructure programmes in our coremarkets and strengthening our capability to compete for major projects and programmes by drawing on resources from across the business and leveraging the Group's worldwide capabilities.

BUSINESS DRIVERS

The majority of North America's projects are government funded, in part or in whole, either through a state or local government or directly throughfederal agencies. Publicly funded projects provide greater stability although they tend to be awarded more slowly and are at greater risk of being delayed due to changing priorities or political scrutiny.

OPERATIONS

Our transportation business has delivered another good performance, particularly with key clients such as the departments of transportation in Florida, Texas, Colorado and Georgia. Other notable contract reselections, extensions and task awards include the Central Florida Expressway and Camino Real Regional Mobility Authority.

Our public and privatebusiness has increased its focus on larger projects and programmes and on select clients. These efforts have resulted in an increase in average contract size. Our client portfolio is expanding with new environmental and general engineering services appointments with city and county governments in Florida, Nevada, and Colorado, and at the state level for organisations such as the Louisiana Coastal Protection and Restoration Authority and South Florida Water Management District.

In aviation, we continue to execute successfully our programme management contract at New Orleans' Louis Armstrong and Atlanta's Hartsfield-Jackson international airports. Notable new contract awards at airports include Los Angeles International, Tampa International and additional work at Austin-Bergstrom International.

Our federal business has expanded its presence in the flood mapping sector with reselection as one of two consultants to provide nationwide mapping services to the Federal Emergency Management Agency. In addition, we were successfully reappointed on our Federal Highway Administration design and construction management services and our Federal Transit Administration programme management contracts.

Our strategic ventures business completed its first year of operation with a diverse portfolio of rail, transit and energy and renewables clients for whom we provide environmental, planning, permitting, programme management, asset management and engineering services.

Faithful+Gould's North American business had a quieter year following the conclusion of some key client programmes and cost reduction measures taken by clients in the oil and gas sector redirecting their demand for our services. Notwithstanding this, the oil and gas sector remains a key part of the business with ongoing work for many of the large operators.

PEOPLE

Our North American consultancy headcount has remained stable due to sustained recruitment efforts throughout the year. Turnover has stabilised and is now in line with industry norms.

We remain focused on attracting then retaining key staff, and we continue to measure employee engagement through our Group wide Viewpoint employee opinion survey. The overall score remains in line with industry benchmarks, but the exercise did highlight areas targeted for improvement as we bed in our TPO.

The implementation in 2014 of My Career, our Group wide online performance management system, is improving the quality of our performance management activities by creating greater links between performance and reward.

We are committed to recruiting, retaining, developing, and elevating minority and women professionals through initiatives such as our sponsorship of WTS International (WTS). Founded in 1977, WTS has a specific mission of fostering lifelong career goals for women in the transportation industry. Our support has included scholarship programmes through our charitable giving foundation, The Atkins Foundation.

SAFETY AND SUSTAINABILITY

Our safety culture plays a central role in how we deliver work. Sustainability and employee wellbeing continued to be an area of focus. We reduced overall injuries by 18% compared with last year and our AIR was reduced by 67%. We exceeded the Group's global AIR goals in all areas. Our serious injury rate is more than four times lower than the industry average.

The Atkins Foundation supports projects that aim to improve the long-term quality of life for those in our local communities. It primarily supports community initiatives focused on education and response to natural disasters. Special consideration is given to programmes that promote science, technology, engineering and mathematics (STEM) subjects.

RISK

A majority of our work is government funded and, as a result, political uncertainty and deadlock caused by the 2016 presidential election may lead to delays in federal programmes and funding. We are closely monitoring Congress's activities for continued funding of programmes, particularly around transportation and highways, where delays would have an adverse impact on our workload.

Previously reported Department of Justice and Securities and Exchange Commission enquiries relating to potential Foreign Corrupt Practices Act violations by The PBSJ Corporation prior to its acquisition by the Group have now been resolved with an agreed settlement of $3.4m.

We identify, review and assess risks across all of our businesses and the process is explained in more detail in the Principal risks and uncertainties section of the Group's Annual Report.

OUTLOOK

We see stable market conditions in the key states in which weoperate. Economic conditions in states such as Florida, Texas, California and Georgia are showing promising developments in funding, coupled with growing investment interest from the private sector.

Our work in hand improved year on year both as a function of improved win rates and the scale and longevity of individual awards, increasing our secured work in hand as a percentage of next year's budgeted revenue to 61.6% (2014: 58.8%) giving a solid platform for future growth.

We will continue our cost and efficiency efforts in the new financial year, building on the savings realised in the year ended 31 March 2015.

As our refreshed consultancy business model embeds further, we expect productivity to continue to increase, helping to drive further margin improvement.

Middle East

PERFORMANCE

Our Middle East business had a strong overall performance this financial year, with revenue up 28.7% to £216.7m (2014: £168.4m) and operating profit up 56.3% on last year. This improvement is a consequence of our continued strategic focus on major projects and programmes in rail, infrastructure and property in the United Arab Emirates (UAE), Qatar and the Kingdom of Saudi Arabia (KSA). We have also seen very good cash performance which is a result of our continued focus in this area and also reflects advance payments on our strategically important major projects. Operating margin improved to 10.4% (2014: 8.6%).

BUSINESS MODEL

Our business model is to maintain strong local resources in our chosen markets, complemented by multi-skilled design centres within the region and in India. This provides agility and efficiency by maximising our ability to mobilise for major projects, while minimising exposure to individual market resource demands and constraints.

STRATEGY

Our strategy in the Middle East is to focus on what we believe to be the region's most robust markets and sectors; namely infrastructure, rail and property in the UAE, Qatar and KSA. The region offers good opportunities linked to the drive for economic diversification and the need to invest in social infrastructure. Our strategy is aimed at carefully selecting and securing critical projects and programmes with established key clients. In addition, local resources support our energy business in the region, which is reported within our Energy segment.

BUSINESS DRIVERS

The economic climate in the Middle East is primarily driven by the global oil price, which affects demand for our services since regional spending ultimately flows through to capital investment in infrastructure, transportation and property. Regional security issues and changes in leadership, whether real or anticipated, can also serve to heighten market sensitivity.

While we have not seen an immediate short-term impact on our workload from the rapid decline in the oil price, there has been a consequent slowing of decision making and more uncertainty around some property and infrastructure projects.

The longer-term need to invest in strategically important infrastructure development that supports economic growth and diversification will continue to drive demand for our services. We have a clear view of well-funded programmes, although timing and scope are increasingly subject to review.

OPERATIONS

Our business built on its strong first half to deliver a significant improvement in full year performance, further reinforcing its position among the Middle East's leading design and engineering consultancies.

Good progress was made on the mobilisation and design delivery for our major metro projects, including Riyadh Metro, Doha Metro Red Line South and latterly Doha Metro Gold Line, a key win in the first half of the year.

The Gold Line, for which Atkins is lead designer for a consortium comprising Greece's Aktor, Yapi Merkezi and STFA of Turkey, India's Larsen & Toubro and the local Qatari contractor Al Jaber Engineering, is the largest civils package of works to be awarded on Doha Metro. With a capital cost of approximately £2.5bn, the project crosses the city from east to west and includes 15km of twin tunnels and 13 underground stations. There continues to be good demand for metro projects across the region, with further opportunities to work selectively for design and build contractors within our core markets.

Transport infrastructure, including roads, bridges and utilities networks, is of critical strategic importance across the region, particularly in Qatar, where we continue to work with the Qatari Government, advising on infrastructure planning and design projects to meet its National Vision 2030. Our key projects include the Central Planning Office, which is making an important contribution to the coordination of Qatar's major transport programmes, and a significant framework contract to upgrade Doha's roads and drainage systems.

In KSA, we supported strategic programmes that are driving the Kingdom's long-term economic growth and diversification, including an ongoing partnership with Bechtel to advise the Economic Cities Authority on the development of four new cities. In addition, we are supporting the Royal Commission of Jubail and Yanbu with its major industrial development activity in the Eastern Province, having signed a third framework contract to provide technical planning consultancy in the final quarter of the financial year.

In Abu Dhabi, we have a broad portfolio of infrastructure projects with key clients including Abu Dhabi and Al Ain Municipality, the Department of Municipal Affairs and Musanada. Notable projects include the design of infrastructure for a £1.3bn, 42 square kilometre Emirati community in North Wathba.

Property sector activity in the UAE experienced an upturn in confidence in 2014, linked to Dubai's successful bid to host Expo 2020, resulting in increased property workloads with selective clients. Our current projects include Dubai Opera House and the residential element of Al Habtoor City, a major new development along Sheikh Zayed Road, the city's main arterial highway.

Our Faithful+Gould business in the Middle East has had a strong year with growth across the UAE, KSA and Qatar. The Confluence acquisition in 2013 added project management strength to the business and we have seen a number of successes in the property sector, notably at the Atlantis 2 super-luxury five star hotel in Dubai, the National Laboratories project in Qatar, Mall of the Emirates extensions and Reem Mall in Abu Dhabi, and new projects for Majid al Futtaim and Al Farwaniyah on Al Zahia Mall in Sharjah. We are also supporting Aramco in KSA as it undertakes a large programme of sports stadia construction.

PEOPLE

Headcount grew strongly, up 597 year on year, reflecting, in part, deployment on our major metro projects. Improved market conditions also led to greater competition for staff, particularly in key markets such as Qatar and the UAE. However, we were pleased that staff turnover remained flat at 16.1% (2014: 16.0%) across the region.

We measure staff engagement through our Group wide Viewpoint survey. Our overall engagement score for the Middle East improved by five percentage points year on year, putting us significantly above the benchmark for our industry sector. This is reinforced by the large proportion of people who indicated in the survey that they are proud to work for Atkins and that they care about the success of the organisation.

During the course of the year, a Middle East women's professional network was established to encourage and enable talented women throughout the region to reach more senior roles. The initiative includes projects to make Atkins an employer of choice for women in the region, with engagement and networking sessions, as well as coaching and mentoring activities.

SAFETY AND SUSTAINABILITY

The improvement in our AIR was driven by an increase in headcount while the number of major accidents was unchanged.

We are demonstrating strong leadership through the implementation of the Atkins minimum requirements (AMR) for construction safety in the region, which provides a platform for close engagement with clients and their supply chains for construction supervision projects, including health, safety and welfare regulations. The AMR has achieved industry recognition.

We extended our commitment to sustainability leadership through the continued funding of the chair and senior lecturer of sustainable design of the built environment at the British University in Dubai.

RISK

Certain countries within the Middle East have greater potential for political change. In addition, it is a region where there is an increased risk of payment delays. Our extensive experience of operating in the Middle East over the last 40 years gives us a level of insight into the political environment which, combined with our focused strategy of carefully selecting both the countries in which we operate and our clients, enables us to mitigate political and commercial risks.

Further uncertainty around the oil price presents a key risk because of the potential impact on government spending and the knock on effect on private sector confidence. Our focus on strategically important projects and programmes gives us a relative degree of insulation from short-term changes, which partially mitigates this commercial risk.

Construction safety remains an elevated risk in the Middle East. We are mitigating this wherever possible and have been instrumental in creating improved standards for the industry.

We track risks across all our businesses. This process is explained in more detail in the Principal risks and uncertainties section of the Group's Annual Report.

OUTLOOK

We have a strong order book standing at 74.2% of next year's budgeted revenue (2014: 62.7%), which reflects our success in winning long-term, major projects. Many of these will continue throughout next year and are considered unlikely to be affected by the oil price uncertainty. We see balanced opportunities across the key property, infrastructure and rail sectors in our focus markets of Qatar, the UAE and KSA.

Asia Pacific

PERFORMANCE

Our Asia Pacific region saw good growth in revenue this financial year, with revenue up 9.2% to £109.7m (2014: £100.5m).

Our operating margin improved compared with last year to 8.9% (2014: 8.0%), despite our continued investment in IT and personnel costs associated with our drive to expand into new territories.

Headcount was slightly ahead, closing at 1,523 (2014: 1,498), due to the market slowdown in mainland China which constrained growth.

BUSINESS MODEL

In Asia Pacific, we operate predominantly in Greater China supplemented by a network of offices across Malaysia, Vietnam, Singapore, India and Australia. We provide our clients with a range of services throughout the entire cycle of urban development, supporting them both in-country and overseas, working in partnership with chosen Chinese contractors.

We have strengthened our regional capability in project management and also draw upon our Group wide expertise to deliver the most technically appropriate solutions to our clients.

STRATEGY

In Hong Kong, we continue to diversify our client base and strengthen our relationships with internationally renowned contractors through our design and build projects. We have also assigned a dedicated team to pursue government projects.

In mainland China, despite the property market slowdown due to the transition from an investment to service led economy and the introduction by the government of a programme of anti-corruption measures, our planning and architecture business remains client focused and is well prepared for the continued growth cycle.

Across the region, we aim to develop our advisory role, forming strategic partnerships with engineering companies and contractors to secure higher value opportunities. As our partners increasingly look for opportunities to invest as well as construct, we seek to work with them at the planning and design stage as well as during implementation.

As the urbanisation of countries in southeast Asia continues, we retain a clear focus on urban planning, transport infrastructure and property. In India, we provide urban planning with a focus on programme and project management in the infrastructure, buildings and property sectors. In delivering our strategy of geographic diversification, we are gaining traction in the wider region, with project wins in Malaysia, Vietnam, Indonesia and Singapore.

BUSINESS DRIVERS

Our growth potential in the Asia Pacific region is underpinned by the speed and scale of urbanisation driving both government spending and the rate of private sector investment.

Outside Asia Pacific, good business opportunities exist for the Group as a whole as major Chinese companies invest in large scale infrastructure development projects outside their domestic market.

OPERATIONS

In Hong Kong, following our appointment to project manage the implementation of key elements of the West Kowloon Cultural District in April 2014, the first foundation works for the M+ Museum and Conservation and Storage Facility have begun. Our team dedicated to pursuing government projects also made good progress, winning a major assignment from the Drainage Services Department to upgrade the sewerage facilities in West Kowloon and Tsuen Wan.

We have been appointed by Leighton-China State JV to carry out the detailed design for temporary works for the underground Exhibition Station and 300 metre long western approach tunnels on Shatin-Central Link, one of the major MTR lines that are under construction.

We have won a consultancy service contract for the detailed design of 650 hectares of reclaimed land in preparation for the construction of the third runway system at Hong Kong International Airport. The expansion plan will allow the airport's annual passenger capacity to increase by 30 million a year upon commissioning by the planning year of 2023 according to the Airport Master Planning of 2030.

In China, the UK Foreign & Commonwealth Office-funded Eco Low-Carbon Urban Planning Methodology continues to enhance our reputation as a pioneer for sustainable urbanisation. We also won a new contract to undertake the development planning of Shangrao High-speed Railway New District, a district of 72.8 square kilometres in Jiangxi Province strategically located within China's high-speed railway network.

Our 2014 memorandum of understanding for global strategic cooperation with China Communications Construction Company Ltd. and its subsidiary China Harbour Engineering Company Ltd. (CHEC) has resulted in work on the Colombo Port City development in Sri Lanka (alongside CHEC).

In southeast Asia, we won a substantial masterplanning project in Jakarta, Indonesia during the year. In Malaysia and Vietnam, we continue to pursue projects selectively in the transport and property sectors. In particular, we are pursuing an increased number of private sector roles by bringing our programme and project management, design, engineering and technical capability together to provide a fully integrated service.

In India, we see good opportunities in the property, masterplanning and transportation sectors. We are working closely with our team in Hong Kong to target selected clients and niche opportunities in the Indian property market.

Our Faithful+Gould business has fully integrated Confluence strengthening our multidisciplinary offering to clients. Our appointment as engineering project manager on the Formula 1 Singapore Grand Prix has been extended for a further three years and our pharmaceutical sector workload remains strong for clients such as Abbott, GSK, Johnson&Johnson, Novartis and Roche. While economic growth has slowed in China and India, we continue to see opportunities in the hospitality sector and have been appointed to project manage the refurbishment works at one of Singapore's most iconic resorts.

PEOPLE

Overall headcount in our Asia Pacific region was slightly ahead in the year although there were marked variations by territory. Staff turnover has decreased to 12.2% (2104: 16.4%), reflecting market conditions. Our ability to attract and retain staff remains a key area of focus for us this year.

We are investing in and developing our human resources infrastructure to support our regional expansion plans, and have also invested in technology and personnel to ensure that we are able to support and sustain our next phase of growth.

In Asia Pacific, our equal opportunities employment approach has helped attract and retain female employees, with 43% of the overall headcount being female and with a 27% representation in senior management roles. Over 40% of all our new hires for graduate engineer and experienced candidate positions, outside Faithful+Gould, were female.

Our work with engineering campuses to showcase the varied opportunities and work culture that Atkins has to offer has resulted in 50% of our overall graduate engineers being female in our global design centres (GDCs). The GDCs have also introduced a flexible working policy. Currently over 20% of the GDC workforce is female.

SAFETY AND SUSTAINABILITY

Against a strong background in health and safety, we were disappointed our AIR increased again this year although the increase is due to a single office-related incident.

In November, we won the Sustainability Award at the British Business Awards 2014 in China. The awards recognise and promote excellence in innovation, enterprise and endeavour in British and Chinese business. The Sustainability Award recognises organisations that have demonstrated a commitment to the building of a sustainable business in China.

In India, we have set up a health and safety forum to review and share safety best practice with other consultants.

RISK

During the year, we have seen political unrest in Hong Kong and the introduction of widespread anti-corruption measures on mainland China, both resulting in potentially increased risk for our business. We continue to monitor developments closely in both territories. If this impacts the flow of work we will take appropriate action regarding headcount and resourcing.

We are expanding our footprint across the region and we recognise that this expansion brings increased risks. These risks have been identified as lack of commercial transparency, political instability and risks associated with operating within unfamiliar regulatory, tax and employment regimes. We mitigate these risks by undertaking research into both the market and specific clients, as well as using professional advisors to assist with legal and regulatory compliance.

We identify, review and assess risks across all of our businesses and the process is explained in more detail in the Principal risks and uncertainties section of the Group's Annual Report.

OUTLOOK

Asia Pacific remains well placed to deliver on its strategic growth plan, helped by the acquisition of Confluence in October 2013. In mainland China, growth is expected to be impacted by the slowdown in the economy during the second half of this year and the Government's anti-corruption campaign, but to remain attractive. Our move to focus on higher quality projects will continue.

In Hong Kong, the Legislative Council's delayed approval of funding has caused a reduction in the pipeline of public work. However, across the segment work in hand is consistent with last year at 49.2% (2014: 49.3%) of our budgeted revenue, and we believe the potential in the region remains underpinned by the speed and scale of urbanisation.

Energy

PERFORMANCE

Our Energy business continued to perform well despite the effect of the low oil price. Revenue was up 7.3% year on year (5.4% on an underlying basis excluding this year's acquisitions and changes to joint venture accounting) and staff numbers increased 24.1% to 1,813. The year on year improvement in operating margin was supported by a reduced level of bidding costs on major programmes as compared with last year. Growth has been supported by successful partnering arrangements and two acquisitions in North America.

BUSINESS MODEL

The Energy business operates worldwide competing against a wide range of competition, from large multinational engineering consultancies to specialist niche players.

STRATEGY

We remain focused on oil and gas, nuclear, conventional power generation and renewables. In these industries we are applying our high end, multidisciplinary engineering skills during both design and operational phases to assure the integrity and economic performance of our clients' facilities.

We continue to look at investment opportunities to selectively expand our geographic footprint and service offering through organic growth, as well as extending and creating new partnering arrangements and targeting acquisitions.

BUSINESS DRIVERS

Our business is underpinned by the global growth in energy requirements as many countries struggle with increasing demand and the desire to decarbonise to mitigate the effects of climate change.

In nuclear and conventional power generation, the imperative to keep existing generation and distribution facilities operating safely for longer remains, as well as the need for technical support around nuclear decommissioning. As many countries look to develop nuclear power as part of their long-term strategy for more secure, low carbon energy, we are seeing momentum gather on nuclear new build programmes around the world. Our skills are therefore in high demand across the entire nuclear lifecycle.

In oil and gas, we continue to see a similar focus on keeping existing production and distribution facilities operating safely for longer, drawing on our safety and integrity services. As the oil and gas industry seeks to reduce operating costs as a consequence of the low oil price, there is continued demand for our advanced engineering skills and lifecycle expertise.

OPERATIONS

Nuclear

Approval from the US Government in September 2014 saw the successful completion of our acquisition of Nuclear Safety Associates. The acquisition not only enhances the capability of the Group's Energy business, with 130 specialists in nuclear safety, design engineering, and professional security services, but also establishes our nuclear footprint in North America in both the federal and commercial US nuclear industries.

Elsewhere our international nuclear portfolio remains strong as we continue to provide a broad range of services to the Emirates Nuclear Energy Corporation in the Middle East on the £20bn Barakah New Nuclear Programme, through our joint venture with French engineering consultancy Assystem, n.triple.a., and to the €15bn International Thermonuclear Experimental Reactor programme in the South of France, through our role as architect engineer, as part of the Engage consortium.

In the year, we signed a memorandum of understanding (MOU) with the China National Nuclear Corporation that will enable us to focus on supporting China's entry into the UK new build market. This MOU represents our first step in building a longer-term relationship with Chinese companies in the energy industry.

Our position in the UK's nuclear decommissioning market strengthened in the year with the award of a new contract with Sellafield Ltd for its £1.4bn Silos Direct-encapsulation Plant project, one of the largest high hazard nuclear waste projects in the world, as part of a joint venture with AREVA and Mace. This award is testament to the success of our strategic partnerships, which continue to deliver some excellent opportunities for the Group.

We continue to be busy on existing nuclear generation and life extension work through our role as an EDF Energy UK Strategic Supply Chain Partner and providing design, engineering, infrastructure and project management services to URENCO's €540m capital expenditure programme.

Our position in the UK nuclear new build market remains strong as we continue to provide engineering and related technical services to Horizon Nuclear Power and EDF Energy for a new generation of nuclear power stations in the UK.

Oil and gas

While the oil price has resulted in challenging market conditions for some of our oil and gas teams, the division overall remains resilient. With much of our experience and expertise in operational support, our clients are seeking the added value that our skills in asset integrity management and production optimisation can bring to improve operational efficiency.

We continue to expand our ability to provide services on a worldwide scale through our operational hubs in the UK, Middle East, North America and Asia Pacific. In October 2014, the successful acquisition of Houston Offshore Engineering added 150 people in North America with world class skills in deepwater, floating platforms.

Further expanding our expertise and international footprint has helped us secure long-term framework agreements for both consultancy and design services for major international oil and gas operators such as BP, Shell, Maersk, Chevron, Apache, Nexen and Statoil.

An addition to our long-term framework agreements, a key win in the year was a five year contract for the provision of structural integrity management services with Talisman Sinopec Energy UK Limited, elevating us to a tier one supplier and building on our previous 10 year multidisciplinary working relationship.

A new five year agreement with Centrica to support decommissioning projects in the UK and Netherlands demonstrates how our cross-industry expertise and decommissioning experience in both nuclear and oil and gas has become an important differentiator in the decommissioning market.

The Middle East market continues to provide opportunity for growth with a strong pipeline of work, including the recent award of a contract to provide engineering services to Shanghai Electric Power Construction Corporation in support of a major project for Aramco and we continue to support the Abu Dhabi Marine Operating Company with the safe life extension of existing critical infrastructure.

Elsewhere, our international oil and gas operations remain busy on projects such as supporting Eni UK Limited's portfolio of assets in Australia, a contract for the INPEX Corporation-operated Ichthys LNG Project, offshore Western Australia, and acting as technical advisor and engineering designers on Singapore's liquefied natural gas (LNG) terminal as part of a five year engineering services agreement for our full range of capabilities, building on our portfolio of projects in the LNG market.

Power

Our power division continues to maintain a significant portfolio in providing high end technical support to large scale power generation and transmission projects with clients such as National Grid, Drax, Eggborough and ENERGOS in the UK.

We became framework partner to SSE Hornsea Ltd in the year to provide end-to-end support through the development and execution of major projects at two gas storage sites in the UK. Our ability to draw on expertise from different parts of the Group, including project costing and management capabilities from Faithful+Gould, was key to establishing this long-term partnership.

This division continues to access new international markets with the award by the Hyundai Engineering and Construction Company to provide engineering design services for the Abu Dhabi Water & Electricity Authority Mirfa Independent Water and Power Project in Abu Dhabi.

As well as building our pipeline in the Middle East, we have been engaged by China Light and Power in Hong Kong to look at options to extend the life of its generating assets. These contracts follow the award of the open ended contract providing engineering design services to Tennessee Valley Authority's coal and gas plants as part of our teaming arrangement with Merrick & Co in North America last year.

Marine renewables

Our portfolio of work in the marine renewables industry continues to expand with the addition of another engineering design services contract for three offshore substations at DONG Energy's proposed Hornsea Project One offshore wind farm. We have secured major contracts with DONG Energy's eight offshore substations, including those at the planned Burbo Bank Extension, Race Bank and Walney Extension offshore wind farm projects in the UK. Our work on Statoil's Dudgeon Offshore Wind Farm also continues.

We have been commissioned by the Carbon Trust to carry out an industry study into the use of low frequency AC technology for offshore wind farm power transmission. This commission to explore ways to reduce the costs of wind power grid integration, together with our work in developing offshore floating technology, improves the viability for wind farms to be located further offshore and therefore helps to position us at the forefront of the industry's next development phase.

PEOPLE

Overall headcount increased by 352 due in part to our two North American acquisitions. Underlying headcount increased approximately 7%, underpinning good business performance. Staff turnover has fallen in line with our expectations and reached a four year low of 8.6% (2014: 11.7%).

We measure employee engagement through our Group wide Viewpoint survey. Our overall engagement score for Energy remains significantly better than the benchmark for our industry sector. A significant majority of people indicated that they are proud to work for Atkins.

Our people have used a variety of platforms to encourage students to consider a career in engineering, including visits by our graduates to school and university events.

We continue to work to increase the proportion of female employees and have introduced a range of flexible working options to help us both recruit and retain staff. This and other initiatives helped us to increase the level of new recruits in the UK this year that are female from 23 to 30 which is 24% of total hires, an increase of 6%.. A women's professional network is now well established in our major office locations and we are piloting a programme to support women returning to work after maternity leave.

SAFETY AND SUSTAINABILITY

The year on year increase in our accident incident rate is the result of a single reportable accident, compared with zero accidents in the prior two years.

Worldwide, we currently have over 120 safety engineers who provide technical and safety engineering services to the onshore and offshore assets of the majority of the large oil companies and we provide similar services to the nuclear and power industries.

We are helping society to make the transition to a low carbon economy through our work on a wide range of low carbon enabling technologies such as nuclear, offshore wind, tidal, carbon capture and storage and biomass. We also work on helping to extract the world's remaining oil and gas resources sustainably.

RISK

The risks identified as being most pertinent to Energy are the oil price remaining low for an extended period and those associated with the safety, environmental and reputational consequences of an error in our work given the high hazard nature of the facilities on which we work.

We have also identified that our plans for growth are potentially affected by the availability of skills. To mitigate this risk we continue to invest in our in-house training academy that now provides externally recognised courses. This year we welcomed over 500 people onto these courses.

We assess risks across all of our businesses and this is explained in more detail in the Principal risks and uncertainties section of the Group's Annual Report.

OUTLOOK

The outlook for our Energy business remains good despite the ongoing market impact of falling oil prices.

We are well positioned in growth markets and have work in hand at 29.8% (2014: 31.8%) of budgeted revenue. We are monitoring the trading environment in oil and gas closely and will react rapidly and adapt to changes; we anticipate reduced volumes in this industry during the coming year and if necessary will redeploy resources to other parts of Energy and across the Group as a whole.

Financial performance review

PERFORMANCE SUMMARY

Our underlying profit before tax was £121.9m, an increase of 14.6% over last year's profit of £106.4m, on revenue that increased by 0.4% to £1.76bn (2014: £1.75bn). This profit includes the benefit of £5.0m of research and development expenditure credit (RDEC) following early adoption of new rules in the UK. In previous years the equivalent benefit was shown as a reduction in the tax charge.

We believe underlying profit is a more representative measure of performance, removing the items that may give a distorted view of performance. In the current year, we have removed profits on disposals and costs associated with disposals of £0.4m (2014: £10.5m), amortisation of acquired intangible assets of £6.9m (2014: £2.7m), exceptional transaction costs of £4.4m (2014: £nil), impairment of goodwill of £2.8m (2014: £nil) and deferred acquisition payments of £1.5m (2014: £nil). The unadjusted reported profit before tax was £106.7m (2014: £114.2m).

Revenue and profit before tax were adversely affected by currency headwinds of £22.8m and £1.1m respectively against a constant currency basis.

Reported operating profit was £118.5m (2014: £113.7m), at a margin of 6.7% (2014: 6.5%). As we state above, we believe a more representative measure of operating profit adds back amortisation of acquired intangible assets of £6.9m (2014: £2.7m), exceptional transaction costs of £4.4m (2014: £nil), impairment of goodwill of £2.8m (2014: £nil) and deferred acquisition payments of £1.5m (2014: £nil).

This shows a more representative underlying operating profit of £134.1m (2014: £116.4m) giving an improved underlying margin of 7.6% (2014: 6.7%).

The aforementioned net profit on disposal of £0.4m is explained in more detail in note 6 and comprises £0.5m of deferred consideration received in relation to our previously disposed UK highways services business and a loss of £0.1m on the disposal of our Polish business.

Headcount closed the year at 18,462 (2014: 17,489), reflecting headcount growth and the acquisitions of Nuclear Safety Associates, Houston Offshore Engineering and Terramar.

NET FINANCE COSTS

Net finance costs were £14.5m (2014: £13.6m). The year on year increase was primarily the result of the increase in the net finance costs on net post-employment benefit liabilities in the UK.

TAXATION

The Group's income tax expense for the year was £21.0m (2014: £17.9m), giving an effective tax rate of 19.7% (2014: 15.7%). The Group's underlying effective tax rate was 20.1% (2014: 19.0%). The increase in the effective tax rate is primarily due to the adoption of the new RDEC regime in the UK, explained in more detail below. Apart from this, the effective tax rate is lower than the UK statutory rate of 21% (2014: 23%) due to continued utilisation of tax losses not previously recognised, the impact of prior year adjustments and our regional profile of profits.

The Group has early-adopted the new RDEC regime in the UK with effect from 1 April 2013. This regime permits research and development (R&D) credits to be recognised above the line rather than as an incentive delivered entirely via tax relief. For the year ended 31 March 2015, this resulted in an increase in our reported profit before tax of £5.0m.

EARNINGS PER SHARE (EPS)

Basic EPS from continuing operations was 87.8p (2014: 98.4p). Underlying diluted EPS on continuing operations was 97.1p (2014: 85.7p), an increase of 13.3%.

PENSIONS

Funding

Cash contributions of £32.0m (2014: £32.0m) were made to the Atkins Pension Plan (the Plan) during the year. Under the latest agreed recovery plan the Group will contribute £32.8m to the Plan for the year ending 31 March 2016, with annual contributions escalating by 2.5% each year until 31 March 2025.

There were no pension settlement or curtailment gains in 2015 or in the comparative period.

Charges

The total charge to the consolidated income statement in respect of defined benefit schemes was £16.0m (2014: £14.3m), comprising current service cost of £2.2m (2014: £2.1m), administrative expenses of £0.2m (2014: £0.2m) and a net interest expense of £13.6m (2014: £12.0m). The charge relating to defined contribution schemes increased to £39.8m (2014: £37.9m).

IAS 19 (revised 2011) - valuation and accounting treatment

The Group determines pension scheme funding with reference to actuarial valuations, but for reporting purposes uses IAS 19 (revised 2011). Under IAS 19 (revised 2011) the Group recognised a reduced retirement benefit liability of £298.4m at 31 March 2015 (2014: £324.2m).

The assumptions used in the IAS 19 (revised 2011) valuation are detailed in note 12.

CASH

Net funds as at 31 March 2015 were £179.3m (2014: £188.3m), made up as follows:

Cash generated from continuing operations was £133.9m (2014: £95.5m), representing 99.8% (2014: 82.0%) of underlying operating profit, and can be summarised as follows:

The movement in non-cash items of £13.0m consists primarily of foreign exchange costs and share based payments, whereas the movement in non-cash items in 2014 of (£9.2m) consisted primarily of the profit on disposal of the highways services business and the loss on disposal of the Peter Brown business.

Net tax paid amounted to £17.8m (2014: £10.9m), with the increase due primarily to higher withholding taxes on cross border trading and higher US payments in this current year.

Net capital expenditure in the year, including the purchase of computer software licences, amounted to £25.2m (2014: £16.9m).

CAPITAL STRUCTURE

As at 31 March 2015, the Group had shareholders' funds of £205.0m (2014: £130.2m) and the Company had shareholders' funds of £196.3m (2014: £186.4m).

The Company had 104.5m fully paid ordinary shares in issue at 31 March 2015 (2014: 104.5m). For further details, refer to note 13.

TREASURY POLICY AND OBJECTIVES

The Group's treasury function manages and monitors external funding and investment requirements and financial risks in support of the Group's corporate objectives. The Board reviews and agrees procedures, requirements and authority levels for treasury activities. The Board delegates responsibility for the detailed review of the policies to the Audit Committee.

The Group's financial instruments, other than derivatives, comprise borrowings, cash and liquid resources and various items, such as trade receivables and trade payables, which arise directly from its operations. The main purpose of these financial instruments is to finance the Group's activities. The Group also enters into derivative transactions, principally forward foreign currency contracts to manage foreign exchange risk on material commercial transactions undertaken in currencies other than the local functional currency.

The main risks arising from the Group's financial instruments are market risk (including foreign exchange risk, interest rate risk and price risk), credit risk and liquidity risk. The Group's exposures to and management of each of the main risks, together with sensitivities and risk concentrations, are described in more detail in note 19 to the Financial Statements, which will be available on our website.

The Group funds its ongoing activities through cash generated from its operations and, where necessary, borrowings and finance leases. The Group's debt facilities are described in note 26 to the Financial Statements. Utilisation of the Group's facilities is a consequence of prior and current year acquisitions and ongoing organic growth. As at 31 March 2015 the Group had £138.1m of undrawn committed borrowing facilities available (2014: £141.5m).

There have been no significant changes to the Group's treasury procedures, requirements and authority levels during the year.

CRITICAL ACCOUNTING POLICIES

The Group's principal accounting policies are described in note 1 to the Financial Statements, which will be available on our website. The Financial Statements for the year ended 31 March 2015 have been prepared under International Financial Reporting Standards (IFRSs) as adopted by the European Union.

The preparation of financial statements in conformity with generally accepted accounting principles requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although these estimates are based on management's best knowledge of the amount, event or actions, actual results may ultimately differ from those estimates. Material estimates applied across the Group's businesses and joint ventures are reviewed to a common standard and adjusted where appropriate to ensure that consistent treatment of similar and related issues that require judgement is achieved upon consolidation. Any revisions to estimates are recognised prospectively.

The accounting policies and areas that require the most significant estimates and judgements to be used in the preparation of the Financial Statements are in relation to contract accounting, including recoverability of receivables, goodwill impairment, defined benefit pension schemes, tax, research and development, and joint arrangements.

CONTRACT ACCOUNTING

The Group's contract accounting policy is central to how the Group values the work it has carried out in each financial year.

This policy requires forecasts to be made on the projected outcomes of projects. These forecasts require assessments and judgements to be made on changes in, for example, work scope, changes in costs and costs to completion. While the assumptions made are based on professional judgements, subsequent events may mean that estimates calculated prove to be inaccurate, with a consequent effect on the reported results.

INSURANCE PROVISIONS

Group companies are from time to time involved in claims and litigation. The Group carries professional indemnity and other insurance cover for such claims. Provisioning for claims is made within our insurance captive and requires judgement as to the likely outcome for which we obtain appropriate advice dependent on the circumstances of each claim.

GOODWILL IMPAIRMENT

Goodwill is subject to impairment review both annually and when there are indications that the carrying value may not be recoverable. The carrying value of goodwill is compared to the recoverable amount, which is the higher of the value in use and fair value less costs to sell.

For the purpose of impairment testing, goodwill acquired in a business combination is allocated to each of the cash-generating units (CGUs), or groups of CGUs, that are expected to benefit from the synergies of the combination. Each CGU or group of CGUs to which the goodwill is allocated represents the lowest level within the entity at which goodwill is monitored for internal management purposes.

Determining whether goodwill is impaired requires an estimation of the value in use of CGUs to which the goodwill has been allocated. The value in use calculation requires an estimate to be made of the timing and amount of future cash flows expected to arise from the CGU and the application of a suitable discount rate to calculate the present value. The discount rates used are based on the Group's weighted average cost of capital adjusted to reflect the specific economic environment of the relevant CGU.

Following the downturn in the European aerospace market, the carrying amount of goodwill arising on the acquisition in 2007 of the Dutch consultancy Atkins B.V. (formerly Nedtech Engineering B.V.) was reviewed and, as a consequence, has been reduced to its recoverable amount through the recognition of an impairment loss of £2.8m. This loss was included in administrative expenses in the Group's Consolidated Income Statement.

DEFINED BENEFIT PENSION SCHEMES

Accounting for pensions involves judgement about uncertain events in the future such as inflation, salary levels at retirement, longevity rates, rates of return on plan assets and discount rates. Assumptions in respect of pensions and post-employment benefits are set after consultation with independent qualified actuaries. Management believes the assumptions are appropriate. However, a change in the assumptions used would have an impact on the Group's results and net assets. Any differences between the assumptions and the actual outcome will affect results in future years. An estimate of the sensitivity to changes in key assumptions is disclosed in note 12.

TAX

The Group is subject to tax in a number of jurisdictions and judgement is required in determining the Group wide provision for income taxes. The Group provides for potential liabilities in respect of uncertain tax positions where additional tax may become payable in future periods and such provisions are based on management's assessment of exposures.

Deferred tax is accounted for on temporary differences using the liability method, with deferred tax liabilities being provided for in full and deferred tax assets being recognised only to the extent that it is judged probable that future taxable profits will arise against which the temporary differences can be utilised.

RESEARCH AND DEVELOPMENT

All R&D expenditure is written off to the consolidated income statement as incurred. In the UK, the Group has early adopted the new UK RDEC regime with effect from 1 April 2013. These credits have characteristics more akin to government grants than income taxes and therefore are offset against the relevant expenditure in the income statement rather than via the tax charge.

The credits are recognised to the extent that there is reasonable assurance that they will be received, albeit that the claim process takes place sometime after the original expenditure was incurred. In the balance sheet, the receivable reduces the overall current tax payable for the Group.

JOINT ARRANGEMENTS

The Group holds 50% of the voting rights in some of its joint arrangements. However the Group has joint control over these arrangements as under the respective contractual agreements unanimous consent is required from all parties to the agreements for all relevant activities. These joint arrangements are not structured through separate legal vehicles and the terms of the arrangements provide the Group and the other parties to the arrangements with the rights to the assets and obligations for the liabilities, or other facts and circumstances indicate this is the case. Therefore, these arrangements are classified as joint operations of the Group.

Consolidated Income Statement for the year ended 31 March 2015

Notes 1 to 16 below form part of the preliminary financial information.

Consolidated Statement of Comprehensive Income for the year ended 31 March 2015

The income tax relating to each component of other comprehensive income is disclosed in note 5c.

Notes 1 to 16 below form part of the preliminary financial information.

Consolidated Balance Sheet as at 31 March 2015

Notes 1 to 16 below form part of the preliminary financial information.

Consolidated Statement of Cash Flows for the year ended 31 March 2015

Notes 1 to 16 below form part of the preliminary financial information.

Consolidated Statement of Changes in Equity as at 31 March 2015

The merger reserve relates to the issue of shares in respect of previous acquisitions.

Notes 1 to 16 below form part of the preliminary financial information.

Notes to the preliminary financial information for the year ended 31 March 2015

1. Basis of preparation and accounting policies

The financial information attached has been extracted from the audited Consolidated Financial Statements of WS Atkins plc for the year ended 31 March 2015 and has been prepared in accordance with International Financial Reporting Standards as adopted by the European Union (IFRSs as adopted by the EU), IFRIC interpretations issued and effective at the time of preparing those Financial Statements, and the Companies Act 2006 applicable to companies reporting under IFRS.

The financial information for the years ended 31 March 2015 and 31 March 2014 does not constitute a summary financial statement or statutory accounts as described and/or defined in Sections 428 and 434 respectively of the Companies Act 2006 for those years. The Annual Report and Financial Statements for the year ended 31 March 2015 were approved by the Board of directors on 10 June 2015, together with this announcement, but have not yet been delivered to the Registrar of Companies (the Registrar). The auditor's report on the Financial Statements for both years was unqualified and did not contain a statement under either Section 498(2) or 498(3) of the Companies Act 2006. The Financial Statements for the year ended 31 March 2014 have been delivered to the Registrar.

The principal accounting policies adopted under IFRS and applied in the preparation of the Financial Statements will be available on the Group's website, www.atkinsglobal.com.

2. Segmental information

The chief operating decision-maker has been identified as the CEO and the Group finance director. The CEO and the Group finance director review the Group's internal reporting to assess performance and allocate resources. Management has determined the operating segments based on these reports.

The Group's operating segments for management purposes reflect predominantly its key geographical markets. The segments are: United Kingdom and Europe (UK and Europe), North America, Middle East, Asia Pacific and Energy.

The CEO and the Group finance director assess the performance of the operating segments based on operating profit before interest and tax. Information provided to the CEO and the Group finance director is measured in a manner consistent with that in the Financial Statements.

Under IAS 31, some of the Group's joint arrangements were assessed as jointly controlled entities and were equity accounted. The Group has assessed the classification of all its joint arrangements following the adoption of IFRS 11, Joint arrangements. Some of these jointly controlled entities have now been classified as joint operations and the Group has accounted for its share of assets, liabilities, revenues and expenses of these joint operations. In addition, the Group has reviewed its reporting of joint operations and joint ventures, and has amended its definition of revenue for segmental reporting purposes to exclude the Group's share of revenue from joint ventures. As a consequence of the adoption of IFRS 11 and the review of revenue reporting, the segmental results and assets of the operating segments have been prepared to reflect these changes. The segmental results and assets for the comparative year ended 31 March 2014 have not been restated, as the impacts were not considered material.

a) Group business segments

Revenue and results

Unallocated central items comprise £6.9m of intangible asset amortisation relating to the acquisition of The PBSJ Corporation (PBSJ), Confluence Project Management Pte. Ltd. (Confluence), Nuclear Safety Associates, Inc. (NSA), Houston Offshore Engineering, LLC (HOE) and Terramar AS (Terramar); impairment of goodwill for the European aerospace business of £2.8m; £4.4m of external fees in relation to the pursuit of an unsuccessful acquisition; £1.5m of deferred payment arising on the acquisition of HOE; release of £3.0m provision relating to the previously disposed of Asset Management business and £2.2m settlement of longstanding enquiries by the Department of Justice and the Securities and Exchange Commission.

Unallocated items for the year ended 31 March 2014 include a £3.0m provision relating to the previously disposed of Asset Management business and £2.7m of intangible asset amortisation relating to the acquisitions of PBSJ and Confluence.

Reconciliation of segmental analysis to profit for the year attributable to owners of the parent and non-controlling interests:

Balance sheet