Final Results

Results for the year ended 31 March 2011

"Good results in a transformational year, positioning the Group for growth."

Design and engineering consultancy group WS Atkins plc (Atkins) today announced its preliminary results for the year ended 31 March 2011.

RESULTS SUMMARY

HIGHLIGHTS

·; Underlying operating profit up 7.5% and underlying operating margin at 7.6% (2010: 8.0%).

·; Integration of strategic acquisition in North America has progressed well and the business is performing in line with our expectations, with margin improvement to 4.6%.

·; Successful debt recovery and diversification into infrastructure in the Middle East delivered regional profits up 70%.

·; Good work in hand at the start of the year, 55% of budgeted revenue (2010:54%).

·; Dividend increased by 5.5% reflecting the Board's confidence in the Group's prospects.

·; Outlook for the current year remains unchanged and in line with market expectations.

Notes:

1. Underlying profit is normalised profit that additionally excludes £8.0m of transaction costs on acquisition of PBSJ this financial year and a pension curtailment gain in 2010 of £2.6m.

2. Revenue excludes the Group's share of revenue from joint ventures.

3. Diluted earnings per share for continuing and discontinued operations was 72.7p (2010: 103.1p).

4. Normalising items add back amortisation of intangible assets of £3.7m on acquisition of PBSJ on 1 October this financial year (2010: £nil) and profit on disposals of joint ventures in 2010 of £0.1m.

5. Staff numbers are measured on a full-time equivalent basis, including agency staff.

We are pleased to report that Atkins has again delivered good results in a challenging economic environment. This was a transformational year for the Group, in which we proved our strategy is working. We balanced our geographic footprint with a North American acquisition and continued to maintain our focus on quality and agility.

We are now well positioned for growth and our outlook for the current year is unchanged.

Enquiries

Notes to editors

1. Atkins

Atkins (www.atkinsglobal.com) plans, designs and enables the delivery of complex infrastructure and buildings for clients in the public and private sectors across the world. Atkins is the largest engineering consultancy in the UK and the world's eleventh largest international design firm (sources: New Civil Engineer Consultants File, 2011; Engineering News-Record, 2010).

Atkins is the official engineering design services provider for the London 2012 Olympic and Paralympic Games.

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 JPMorgan Cazenove, 20 Moorgate, London EC2R 6DA at 8.30am. Dial-in details are available from Smithfield for those wishing to join the presentation by conference call. A webcast of the presentation will subsequently be available via the Company's website, www.atkinsglobal.com.

4. Cautionary Statement

This news release and preliminary financial information (news release) have only been prepared for the shareholders of the Company, as a whole, and their sole purpose and use is to assist shareholders to exercise their governance rights. In particular, this news release has not been audited or otherwise independently verified. The Company and its directors and employees are not responsible for any other purpose or use, or to any other person, in relation to this press release.

This news release 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. 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 has had another good year. The Group has extended its geographic presence with the acquisition of the North American based consultancy PBSJ (rebranded Atkins with effect from 1 April 2011) on 1 October 2010. This strategic acquisition provides increased resilience in a challenging economic environment. It also demonstrates our ability to succeed in pursuing growth opportunities during difficult times in a number of our markets. The Group is now managed through a regional model and this is reflected in our revised segmentation.

In the year ended 31 March 2011 the Group's revenue increased by 12.7% to £1,564.3m, with staff numbers increasing by approximately 2,000. On an underlying basis the Group's operating profit rose by 7.5% to £118.7m and the Group's operating margin was 7.6%. This improvement in underlying operating profit was achieved despite challenging economic conditions in a number of our markets. The underlying operating profit excludes transaction expenses of £8.0m and intangible amortisation of £3.7m relating to the PBSJ acquisition.

The Group's liquidity remains strong, driven by a good cash performance in the second half of the year, and we ended the year with net funds of £123.3m.

Our growth in staff numbers is predominantly as a result of the PBSJ acquisition. We have continued to flex staffing levels across the Group as we anticipate market demand for our services.

As we had expected, in a number of our markets, fiscal budgets have remained under pressure throughout the year. However, the future for the built environment will bring more complex engineering challenges as our clients put greater emphasis on planning and design disciplines to achieve maximum value from their infrastructure programmes. This is our core competence and therefore we are confident that we can continue to offer our clients effective solutions.

People

Atkins is a technical design and engineering consultancy and we rely on the ability of our employees to satisfy our clients' requirements. We continue to be impressed with the professionalism, talent and commitment of our staff who are delivering very effective solutions to our clients' complex infrastructure challenges. This is particularly impressive when budgets are under pressure and we are making staff reductions in certain sectors across our business.

We continue to invest in the training and development of our people and, in particular, in the development of a suite of carbon calculation tools to help our staff and clients deliver lower carbon engineering solutions.

Dividend

The Board is recommending a final dividend of 19.5p, taking the total dividend for the year to 29.0p (2010: 27.5p), an increase of 5.5%. If approved, the dividend will be paid on 30 September 2011 to ordinary shareholders on the register on 26 August 2011.

Outlook

The Group continues to demonstrate its resilience in difficult economic conditions, while at the same time delivering our strategy through geographic and sector diversification supported by a strong balance sheet. The Board remains confident in the Group's strategy and its ability to deliver shareholder value, and its outlook for the current year remains unchanged.

Business review

United Kingdom

Performance

Overall our UK business performed in line with our expectations, successfully navigating difficult market conditions. The UK Government's spending review in October 2010 removed some of the market uncertainty and confirmed our expectation that public sector spending will remain tight while the budget deficit is addressed. We have seen mixed performance during the year across the range of markets served and have reduced staff numbers by 7% as we have flexed our resource levels to meet anticipated demand.

Business model

This operating segment consists of businesses that are primarily focused on the UK market where we plan, design and enable our clients' capital programmes in and around the built environment. Our business is that of a technical consultancy, and we provide advice and engineering design for public and private sector clients. The multidisciplinary nature of our skills allows us to draw on expertise from across the business to deliver complex projects both in the UK and in support of our other businesses overseas.

Strategy

We have identified that material growth in this segment will be difficult in the near term and therefore our focus remains on managing headcount to meet the anticipated market demand for our services, driving efficiency in our operations through cost reductions, and supplementing skills with niche acquisitions where appropriate. We continue to invest in developing our people, focusing on quality, technical excellence and innovation.

Business drivers

The economic environment significantly affects the opportunities available to the business, although our diversified business provides some resilience to market fluctuations. We are the market leader in UK engineering consultancy, with preeminent rankings in the roads, rail and defence sectors.

The outcome of the UK Government's spending review and the recent Strategic Defence and Security Review were largely as expected. The rail industry value for money study by Sir Roy McNulty will influence the future shape of the industry and we consider his recommendations a positive step for the industry.

Operations

Our design and engineering business, employing around 1,000 staff had a year of change both in terms of its external market and some internal reshaping. However, it closed the year strongly with a continued focus on delivery of projects with clients such as the Olympic Delivery Authority and the London Organising Committee of the Olympic and Paralympic Games, in our role as the official engineering design services provider for the London 2012 Olympic and Paralympic Games. This multiple award winning project is an excellent example of the depth of multidisciplinary expertise within the Group. Our resources in the UK in this business also play an integral role providing agile design management and technical capability to assist in the delivery of projects in a number of our overseas markets.

Our highways and transportation business contracted during the year following exceptionally strong work volumes in 2009/10 where fiscal stimulus packages buoyed the market, together with higher design revenue from major design commissions such as the M25 widening. Delays and cancelations of schemes for the Highways Agency and tightening of local authority and central government budgets significantly impacted the business and led to a reduction in headcount, with staff numbers closing the year at around 2,500. This also suppressed margins as the costs of right-sizing the business were taken in-year. The highway services market was more stable for us as a result of our portfolio of existing longer term contracts, the first of which will be subject to tender in 2013. The Department for Transport's announcement of additional funding for highway repairs is welcome news and we anticipate that this will bring around £10m of revenue to our highways business. We have been appointed to all four of the Highways Agency Professional Support Frameworks; a notable achievement that creates a strong platform for this business.

Our design work for the widening of the M25 is almost complete, with the first sections fully open to traffic, keeping the overall programme below budgeted cost and on track to complete in time for the London 2012 Olympic and Paralympic Games. The related 30-year operation and maintenance joint venture contract is progressing in line with expectations. The joint venture, which comprises Balfour Beatty (52.5%), Egis (15%) and Atkins (32.5%), provides services in network management, asset inspection, traffic management, tunnel operations, incident management and routine and winter maintenance for the entire M25, over a distance of 250 miles.

Our rail business of around 1,400 staff continues to deliver complex design solutions on major rail upgrade schemes, predominantly for Network Rail. The business had a challenging year with margins under pressure as this well funded market attracted significant competition, particularly in the civils business.

We have largely completed the highly complex resignalling of the North London Line, a project that reinforces Atkins' ability to successfully and reliably deliver complex projects. The Newport resignalling project has progressed well during the year, with the key May deadlines completed to programme.

Our water and environment business of around 1,400 staff is seeing an improving volume of work as the latest five-year regulatory Asset Management Programme (AMP5) takes effect. Although some clients were initially slow to release work due to the wider economic situation, there is a substantial programme of investment required by the industry to meet the UK regulator's settlement and work is now starting to flow. Our geotechnical, environmental and planning businesses continue to support large projects such as Crossrail and the London 2012 Olympic and Paralympic Games.

Our defence, aerospace and communications businesses have performed well during the year. Around 900 staff focus on high-technology industries, predominantly in the UK, Europe and Middle East. Our aerospace business performed strongly during the year and we continue to expand our offering and geographic footprint with clients such as Airbus and Rolls Royce. Communications and security remain strong market segments for our skills and capabilities both within the UK and the Middle East. In defence, the decision to cease the Hydrus design project necessitated some headcount reductions. However, demand for core capabilities in this sector remains strong and we enter the new financial year in a stable position.

Our management consultancy business performed well, improving on its strong position in the UK security and intelligence market. We managed to navigate difficult conditions in the wider public sector to continue the strong performance of recent years and we finished the year winning the BAA IT outsource contract in partnership with Capgemini, leveraging our position in aviation.

Faithful+Gould provides project and cost management services to a wide range of clients across the public and private sectors and continues to operate in a challenging market driven by tight UK Government spending. There has been some slowdown in public sector opportunities, although we have balanced this with wins, mainly in the higher education sector, for new residential and teaching space. We have strengthened our presence in the water sector with an appointment on the Welsh Water framework and in the energy sector with further work for EDF. We had a number of other notable private sector wins, including GlaxoSmithKline, Lloyds Banking Group, Tesco, and Coca-Cola Enterprises. Our work with the Government continues, with much of it coming through the Office of Government Commerce (OGC) framework.

Our asset management business provides independent property asset management services to a number of private sector clients and to public sector organisations, including law and order, education, health and defence. The business has performed well in the period with the satisfactory resolution of market testing challenges on a number of its contracts.

People

We rely on our professionally qualified, highly skilled and experienced staff, both in the UK and in Bangalore, to work together to deliver multidisciplinary design projects. They are essential to delivering the highest quality product for our clients and as such we have continued to invest in their development and training despite the tough economic conditions.

Outlook

The outlook for the UK is stable. We have a solid, diversified platform to navigate short term market challenges and a breadth of quality expertise that will help us exploit opportunities when growth returns in the medium term. We have good positions in some well funded markets. Work in hand is broadly consistent with the same time last year and we enter the new financial year with confidence in our ability to navigate what remains a difficult market. Further, our depth and breadth of expertise in the UK is essential to supporting projects in a number of our overseas businesses.

North America

Performance

The results of the North America segment consist of our Faithful+Gould business, which provides project and cost management services to a wide range of clients across the public and private sectors, together with six month's results for PBSJ, which was acquired on 1 October 2010. PBSJ is an award winning multidisciplinary business providing a full range of design, engineering and project management services for buildings, transportation and other infrastructure programmes together with building construction management.

Trading in the first six months of our ownership of PBSJ has been in line with our expectations and the acquisition provides us with an excellent platform for future growth in the largest economy in the world.

Integration has progressed well and we are confident in our ability to leverage our enhanced capabilities. We have also combined back office services for Faithful+Gould with those of PBSJ, providing a modest level of cost synergies in these support areas going forward.

Business model

This operating segment consists of businesses that are primarily focused on the North American market where we plan, design and enable our clients' capital programmes. We are in over 100 locations in 29 states serving a range of public and private sector clients. Our multidisciplinary capability delivered through these offices allows us to draw on expertise from across the region to deliver complex projects in North America and to provide technical support to other businesses across the Group.

Strategy

The acquisition of PBSJ is a major step in our strategy to develop a number of home markets. It increases our presence in North America to around 3,300 staff and provides us with access to the world's largest engineering consultancy market.

Our strategy for the acquisition going forward is consistent with our existing business unit level strategy, namely Identity+Excellence, ensuring we maintain a deep understanding of the skills demanded and offered (Identity) and delivering these to a degree of quality which keeps us competitive (Excellence).

Our key strategic priority is to deliver and grow shareholder value from the acquisition and improve the profitability of the business. We expect to subsequently grow our operations in the region, both by extending our technical offering and by geographic expansion across North America.

Finally, we are able to leverage specialist skills from within North America to strengthen the Group's offering in other parts of the world; an example of this is our work in the Middle East on the Jeddah Airport project utilising PBSJ's world class airport planning and engineering expertise.

Business drivers

More than 60% of our work comes from state and local government clients, with around a further 20% from federal work, providing a relatively stable underlying workload of repeat business. Our workload is therefore subject to public sector funding, which remains under close political scrutiny and subject to protracted negotiation through local and Federal Government.

The disaster response and emergency management aspects of our federal work arise as a consequence of natural disasters and emergencies and, as such, are relatively unpredictable in nature and timing.

Operations

Our transportation business, which accounts for approximately 44% of the business, supports the private and public sectors and focuses on the design and performance of transportation systems. Our capabilities include all aspects of transport planning, programme management, design, traffic operations, construction management and maintenance.

PBSJ has been a long-standing consultant to the state of Florida Department of Transportation (FDOT), one of the nation's largest transportation entities. Last year we were reselected as general engineering consultant for FDOT districts three, five and seven, and the state-wide intelligent transportation system's general consultant contract. Together, these contracts are worth approximately $100m over the next five years, through which we will provide a wide range of planning, engineering and technical services. In addition to these four contracts, we continue to serve as general engineering consultant to FDOT's Florida Turnpike Enterprise, one of the nation's top toll road organisations overseeing nearly 500 miles of toll roads.

Delays in passing the National Transportation Bill through Congress have reduced the volume of work coming to market in connection with large programmes. We expect that once the bill is passed, the significant backlog of infrastructure maintenance and upgrade work will begin to be addressed.

Our design and federal business of around 500 staff provides engineering, planning, architectural and surveying services to markets including defence and disaster response/mitigation, energy and environmental, education and entertainment design services.

We are assisting the US Department of Defense in transforming US Army Garrison Fort Belvoir, Virginia into a world class federal centre of excellence. The aggressive $4bn, 6.3m square feet development programme is driven by the Base Realignment and Closure Act of 2005, which directed the relocation of over 20,000 military staff from closing bases and leased facilities onto the military installation by September 2011. Under a six year, $60m IDIQ contract, we provide a comprehensive range of support including masterplanning, programme and project management, engineering, conceptual design, transportation planning, scheduling, cost estimating, GIS and community outreach and communications.

Our infrastructure, water and environment business has around 1,300 staff working across water management services related to the development, renovation and optimisation of water and wastewater treatment facilities, water distribution and collection systems. Additionally, we work on watershed management plans addressing issues such as water quality, flood mitigation and water course stabilisation.

We continue to lead a team providing flood map production and related technical services for approximately one third of the United States. In this role, over 100 employees support the Federal Emergency Management Agency (FEMA) by preparing and revising flood maps, monitoring and assisting external partners, performing quality reviews of work by others and advising on technical and policy issues. FEMA's National Flood Insurance Program (NFIP) is one of the largest civilian mapping programmes in the world, and the 20 states within the territory managed by Atkins have a combined flood risk of over $91bn.

Peter Brown Construction has provides general contracting, design-build, and construction management services, predominantly in Florida and Georgia, working for a number of public and private clients.

Our Faithful+Gould business continues to win work for public and private sector clients providing project management and cost control services in an increasingly cost-conscious market.

People

Our staff are essential to the successful delivery of a quality service to our clients. The majority are highly skilled, postgraduate-educated professionals with world class technical expertise. We invest significant time and resource in keeping our staff trained in current methods and technologies.

Outlook

The medium term outlook for North America remains good, with an ageing infrastructure that requires significant investment in areas where we have core expertise. In the short term, the outlook is dependent on continued modest growth in the economy and the progress of federal infrastructure bills through Congress.

Work in hand stands at 47% of this year's budgeted revenue and we continue to drive cost savings and efficiencies through the business to improve margins.

Middle East

Performance

Our Middle East business had a very good year. The increased profit performance primarily reflects the recovery of a number of long outstanding debts, although the underlying operating margin of the business remained above 10%.

We continue to adjust our staff numbers to reflect prospective workload and mix of locations. During the year, staff numbers reduced by 16.7% to 1,555 (2010:1,867). This is a result of reduced activity in the property market, along with the transfer of approximately 100 staff to the Energy segment. This reduction is actively being offset by the success of our strategy to increase our planning and infrastructure capabilities across the region.

Business model

We have an established presence in seven Gulf locations, through which we deliver our multidisciplinary design and engineering consultancy services. We now have a permanent establishment in the Kingdom of Saudi Arabia (KSA) and, with our newly established partnership, we are able to deliver significant resource and expertise to the Kingdom to meet the demand for design services. This new market opportunity adds to our already well-established businesses in Abu Dhabi, Dubai, Qatar, Oman, Bahrain, India and Kuwait.

Strategy

Our strategy in the Middle East continues to be one of sector diversification and geographic expansion as we develop a multidisciplinary business across the region. This strategy has seen the business move away significantly from its Dubai-centric building design focus, to serve a broader infrastructure market, securing work in airports, rail, defence, planning and management consultancy.

Business drivers

The economic climate and market confidence in the region, which is driven primarily by the global price of oil, is key to the demand for our services, as regional spending ultimately flows through to infrastructure. Additionally, the longer term need to develop infrastructure for growing economies and populations will drive demand for our services. Events such as the 2022 FIFA World Cup in Qatar also create localised opportunities.

Political unrest in parts of the region could interrupt our Middle East business. However, to date this has only had a minor impact on our business in Bahrain.

Operations

Our long standing dependency on the property and building design market has reduced significantly over recent years with infrastructure, planning and consultancy now representing 69% of our order book. In addition, we have extended our geographic footprint, with 64% of our order book now located outside the United Arab Emirates (UAE).

Successful completion of the Dubai Metro Red Line remains a high-profile reference, proving our capability and capacity to deliver large scale, multidisciplinary infrastructure projects. This capability was important in our award of the concept design for the 1,300km Etihad Rail project (formerly Union Rail) in Abu Dhabi, a central element in the modernisation of the UAE's goods distribution network, and the King Abdulaziz International Airport in Jeddah, for which we are the lead designer and programme manager for a new 30 million passenger per annum terminal with the associated buildings and infrastructure.

Our work on the Dubai Metro Green Line continues, along with other rail-related work such as the Makkah Metro project in KSA, Lussail Light Rail in Qatar and the Kuwait Metro.

People

We believe our staff numbers have now stabilised, having previously been reduced significantly in line with anticipated market demand. We have increased our investment in key staff making a number of strategic hires to strengthen our capability.

Outlook

Overall market sentiment is improving, although the timing of work remains unpredictable, making resource planning challenging. Qatar, following its successful bid to host the 2022 FIFA World Cup, and KSA have announced significant infrastructure and housing investment, which present excellent opportunities for our business.

Our order book at 31 March 2011 totalled 89% of budgeted revenue for 2011/12 (2010: 57%), positioning us for growth this year.

Asia Pacific and Europe

Performance

Our Asia Pacific and Europe business has performed well as we have continued to focus on improving the quality of our offering in the various markets served. The segment consists of our design and engineering consultancy and Faithful+Gould businesses in Hong Kong, mainland China and Singapore, and six countries across Europe: Denmark, Ireland, Norway, Poland, Portugal and Sweden.

The portfolio of businesses has increased revenue by 4.4% and improved margins significantly year on year to 7.8% (2010: 5.0%). Average staff numbers remained broadly flat at just over 1,900.

Performance within this segment has been driven largely by the relative economic conditions in the different markets. Asia Pacific has shown strong growth in the sectors in which we operate. In contrast, parts of Europe, such as Ireland and Portugal, continue to struggle. Our Scandinavian businesses have performed well, with continued expansion and diversification.

Business model

We operate through a network of offices in Asia Pacific and Europe. We deliver multidisciplinary services and share technical expertise in support of our clients.

Strategy

We continue to invest in China to take advantage of opportunities for the longer term as the market opens up, recognising that it could take several years before material growth is achieved. We have focused on the development of our architectural and urban masterplanning businesses, applying world class design and planning talent to take advantage of the market potential. As part of our strategy we have strengthened our architectural design capability and this, coupled with our Hong Kong infrastructure design skills, will provide added value to our customers.

In Hong Kong, we have expanded our mechanical and electrical engineering capability by recruiting key talent and also significantly increased our architectural practice. We continue to broaden our infrastructure work to serve contractors and private sector developers, providing a greater platform for further revenue and margin growth.

We continue to develop our core Scandinavian businesses, broadening the services we offer through organic growth and targeted acquisitions. Our acquisition of the 20-person Danish bridge engineering and tunnelling consultancy Gimsing & Madsen in November 2010 builds on our existing relationship with this business and enhances our medium and long span bridge capability.

In Poland, we continue to focus on our project and environmental services for the transport and energy markets and this year we were appointed as the owner's engineer for the Polish liquefied natural gas (LNG) project.

We maintain our commitment to Ireland and Portugal despite the difficult economic conditions. Together, these markets now account for less than 1% of the Group's turnover.

Business drivers

The two regions within this operating segment are at different stages of the economic cycle. Asia Pacific and, more specifically China, is growing and investing in infrastructure in both the public and private sectors, giving us good growth potential.

In a number of areas of Europe, especially Scandinavia, investment is also underway in critical infrastructure in both the public and private sectors, providing good growth potential. However, government austerity measures in Ireland and Portugal are reducing the available work, impacting future opportunities and creating increasing pricing pressure.

Operations

Our Chinese business continues to improve margins and we are seeing increased activity in most of our markets. The Hong Kong rail infrastructure market remains buoyant and our design work for MTRC is progressing well. Our Hong Kong business was recognised for the quality of its work when it was presented with a Gold Quality Award by MTRC for its design on the West Island Line and Express Rail Link projects. We are also securing further commissions with contractors as the rail delivery programme moves into the construction phase. Our continued success in the local market has allowed us to consolidate the core skills of civil, highway and bridge engineering and also to recruit and expand our range of services. The addition of building services and architecture skills to the Hong Kong team further enhances our potential. The Hong Kong Government is still issuing a wide range of tenders and appears committed to its major infrastructure expenditure programme. With our strong position in the market, we are well placed to deliver these upcoming projects.

Faithful+Gould, which has 150 (2010: 156) staff in Asia Pacific is seeing a stable pharmaceutical and oil and gas sector, with increasing opportunities in the industrial and property sectors.

Our urban planning and architectural businesses in mainland China, which operate out of three primary locations, are performing in line with our expectations in a highly competitive, yet extremely buoyant, property market. Notable projects include design of the 200m HQ tower for the Bank of China, as well as a luxury hotel and villa complex within the most prestigious resort area of Hainan island. Tourism and leisure are particularly buoyant and we are working on a variety of projects involving international five star hotel operators and high profile golf course designers. Interest in low carbon design is growing in the public and private sectors, enabling us to deploy Group-wide skills in urban planning and building design. We continue to focus our effort on enhancing our skills and improving the quality of our offering in this market.

Our Scandinavian businesses, with a total of approximately 550 staff (2010: 500), have performed well. Our acquisition in Denmark of Gimsing & Madsen has helped us secure new work, including the preliminary studies and design work for several new and existing bridge structures as part of a widening programme on the Køge Bay motorway in Denmark. Expanding the motorway from six to eight lanes will require the construction of seven new bridges, the extension of nine existing bridges and re-insulation of three.

We have also been chosen as part of a consortium with Vössing, EKJ Consulting engineers and Sweco to design the first phase of high speed enabled rail line in Denmark. The award by Rail Net Denmark includes the construction of 60km of new line which will link with the 180km route from Copenhagen to the German border. This flagship project is the first Danish line designed for high speed operation. It is also the first new line to be built in more than a decade. This win helps us build on our existing expertise in high speed rail and is informing our preparatory work on new systems in North America, Sweden, Norway and the UK.

We are progressing well with Denmark's European Rail Traffic Management System project (ERTMS). This is a significant resignalling design contract extending over 15 years. It is the first time an advanced system like this has been fitted to an entire country's strategic rail network and it will set the standard for Europe. We also continue to provide consultancy on the transportation package for the Copenhagen Metro Circle Line.

People

We continue to invest in and develop our people in a portfolio of markets with very different staff turnover and retention rates. The Asia Pacific region has seen staff turnover increase as the economy expands rapidly, creating recruitment and retention challenges. In contrast, in parts of Europe we have had to adjust staff numbers downwards in line with prospective workload.

Outlook

Overall, the outlook for this operating segment remains good. There are good prospects for our rail design and infrastructure businesses in Hong Kong and continued strong demand for urban planning and architectural design in mainland China. Our Scandinavian businesses continue to grow steadily, while our other European businesses still face challenging market conditions.

This segment has secured work in hand of 53% of 2011/12 budgeted revenue (2010: 56%), which provides a good platform for continued growth.

Energy

Performance

Our energy business continues to perform well with revenue up more than 20% year on year and profit up slightly. The reported margin has been suppressed by our significant investment in strategic opportunities, such as the recently announced nuclear joint venture with Assystem, n.triple.a, and acquisitions in the power and oil and gas sectors.

Business model

The Energy business operates worldwide in several home markets, competing both in its own right and through several joint ventures against a wide range of competition, from large multinational engineering consultancies to specialist niche players.

Strategy

We continue to look at investment opportunities, selectively extending our geographic footprint through organic growth, partnering arrangements and targeted acquisitions. We remain focused on nuclear, oil and gas, conventional generation and renewables and are applying our high end engineering skills to assure the integrity of existing operational facilities and the design of new facilities.

In February 2011 we announced that we had formed a strategic alliance, n.triple.a (The Nuclear Atkins Assystem Alliance), with the French engineering consultancy, Assystem. n.triple.a is a 50/50 joint venture targeting nuclear new build opportunities as well as services for the entire nuclear fuel cycle. The alliance will provide consultancy and engineering services to countries developing nuclear power as part of their energy mix, whether they are considering nuclear new build projects or infrastructure across an existing portfolio. The agreement marks a significant step forward in achieving our aspiration to be the leading global nuclear infrastructure consultancy and a number of active international opportunities are being pursued.

Business drivers

Our business is underpinned by the requirements of an energy sector that is dealing with increasing demand in areas of high population growth, dwindling natural resources and an imperative to decarbonise. 

High oil prices drive demand to keep existing facilities operating longer drawing on our safety and integrity services. The move towards more deepwater production also creates opportunities for our advanced engineering skills.

The development of a global gas market has allowed us to win a number of challenging projects in liquefied natural gas (LNG) and gas storage and we see this trend continuing.

In nuclear we see a similar trend to oil, with increasing focus on keeping existing facilities operating safely for longer, with a continuing requirement for technical support around nuclear decommissioning. In addition many countries around the world are turning to new build of nuclear power plant as part of the long term solution for decarbonisation. Our valuable nuclear skills are in high demand across the entire nuclear lifecycle.

Across our entire energy portfolio the limitation on growth is the availability of skills. We therefore continue to invest in our in-house training academy, which this year welcomed more than 270 staff onto its courses.

Operations

Our nuclear business remains busy on existing nuclear generation and decommissioning work, continuing to build on its established base in the UK. In the year we were awarded a framework contract by Magnox Ltd for the design of facilities for the retrieval and processing of solid intermediate level radioactive waste (ILW) across all the Magnox sites in the UK, as well as a framework contract for decommissioning services at Dounreay for Dounreay Site Restoration Ltd.

We continue to win work for the nuclear new build programme in the UK and we remain confident that recent events in Japan have not detracted from the UK nuclear new build programme which provides us with significant opportunities. Preliminary findings from the UK Government's review into safety standards in the nuclear industry, in the light of the Fukushima Dai-ichi power station incident, concluded that there is no reason why the UK should not proceed with its current policy, namely that nuclear should be a significant part of the future energy mix.

Outside the UK we are pleased to report that our work on the International Thermonuclear Experimental Reactor (ITER) programme, being built in the south of France, is progressing to plan. ITER is the next step in a global research and development programme to harness nuclear fusion to generate electricity. The €150m contract was won by a multidisciplinary Atkins team, working in joint venture alongside three other companies. As architect engineer, the joint venture is providing full multidisciplinary design services for this €3bn capital project.

Our power business has gone through a transformational year with the acquisition of the Technical Services Scotland (TSS) consultancy and the technical support team from RWE npower's Bellshill Technical Services group. This acquisition expands our combined thermal generation offering and is already generating client interest as we use our combined skills to access new project opportunities. This has directly led to our appointment as technical support framework providers to both Drax and Eggborough. We have, however, lost a follow-on contract for customer services support with the Carbon Trust, meaning that 55 staff will leave the business in the early part of 2011/12. Our power business is consequently now more focused on its mainstream engineering consultancy activities.

A buoyant oil price, and the increased focus on integrity management and safety following the Macondo incident in the Gulf of Mexico, have driven activity in the offshore oil and gas industry, which has increased demand for our teams in the UK, North America and the Middle East.

On 6 June 2011 we announced the acquisition of Pöyry's 130 people-strong oil and gas engineering design and operational support businesses. This acquisition represents a step up in our ability to deliver process-led multidisciplinary projects on a worldwide scale, adding to our traditional oil and gas consultancy and assurance services.

We are currently supporting the development of Singapore's first liquefied natural gas (LNG) terminal, and in June 2010 we were appointed as investor's supervisor for a LNG regasification terminal in Świnoujście, Poland, the first such installation to be constructed in Eastern Europe. The terminal is recognised as one of the most strategic investments in Poland and will provide energy security for the country by increasing the diversity of gas suppliers.

We also continue to build our reputation in supporting the development of difficult oil and gas fields. Our relationship with Chevron, for example, spans the globe. We are supporting its activities in the North Sea, Gulf of Mexico, Australia, West Africa and Brazil providing our full range of services and capabilities to one of the largest current capital expenditure programmes in the oil and gas industry.

Our experience in the offshore oil and gas industry has allowed us to take a significant position in the marine renewables sector, which is a key component of the UK Government's low-carbon strategy. We have built significant capability in this sector and our multidisciplinary approach of combining our experience in offshore structures, power transmission and distribution makes us well placed for this expanding market over the longer term.

Earlier this year we were awarded a contract to provide expert engineering design advice as part of a high profile wind power alliance supporting Scottish and Southern Energy plc in its drive to boost renewable energy provision. We have also recently been appointed as the designer for the meteorological masts for the Dogger Bank offshore wind farm, potentially one of the largest in the world.

People

Our people are highly skilled professionals with world class technical expertise that is an essential part of the high quality service we provide to our clients. They are frequently called upon to assist with the industry's greatest challenges.

This has been illustrated in the past year by our involvement in the aftermath of the Macondo incident in the Gulf of Mexico last year. Engineers from our Houston office were seconded to the BP Incident Response team for several months, providing a range of technical expertise. We are now supporting BP with the implementation of a number of findings that arose from its internal investigation and it is calling on our capabilities to support a number of activities as part of a review of its global drill rig fleet.

In a similar vein we are currently working with EDF in support of the programme management of the UK nuclear fleet following the recent incident at Fukushima in Japan.

Our year end staff numbers in this segment include approximately 100 staff transferred from the Middle East as part of an internal reorganisation.

Outlook

The outlook for our energy business is very good. Work in hand is at similar levels to last year, at 29% (2010: 28%). Strategic investment through acquisitions and joint ventures has strengthened our business and we are well positioned to capitalise on a strong market.

Performance summary

Reported operating profit was £107.0m (2010: £113.0m) at a reported margin of 6.8% (2010: 8.1%). The year on year reduction in margin was primarily due to costs associated with our acquisition of PBSJ, with £8.0m relating to acquisition costs and £3.7m of amortisation of intangible assets acquired. Adjusting for the effect of these provides a better view of the Group's underlying performance, showing operating profit of £118.7m (2010: £110.4m) and a margin of 7.6% (2010: 8.0%). We believe that these are good results for the Group in what are challenging economic times.

Underlying profit before tax improved to £102.7m (2010: £93.9m), having adjusted for the acquisition and amortisation costs mentioned above.

Net finance cost

Net finance cost was £14.1m (2010: £14.6m). The year on year reduction was primarily a result of the lower finance costs of the Group's net pension deficit.

Taxation

The Group's income tax expense for the year was £18.4m (2010: £19.3m) giving an effective tax rate of 20.2% (2010: 20.0%). The Group's normalised effective tax rate was 21.0% (2010: 19.8%). This rate is lower than the UK rate (28%) due to continued benefits from research and development (R&D) tax credits and the proportion of overseas profits earned in jurisdictions with a lower tax rate.

The Group's tax position will continue to be impacted by our regional profile of profits and by the benefit of R&D tax credits.

Earnings per share (EPS)

Basic EPS from continuing operations was 74.3p (2010: 79.5p). Normalised diluted EPS on continuing operations was 75.0p (2010: 77.8p), a decrease of 3.6%.

Pensions

Funding

The latest actuarial valuation of the defined benefit Atkins Pension Plan (the Plan) was carried out as at 31 March 2010. We have now reached agreement with the Trustee of the Plan with respect to this triennial actuarial funding valuation and the associated recovery plan. The result of the valuation shows a funding deficit on an actuarial basis of £293m as at 31 March 2010. The Group's principal UK employing company has also commenced a consultation process with its employees who are members of the Plan relating to a proposal to remove the link between employees' accrued pension and future increases in salary. This change, which affects approximately 1,400 employees, would reduce the deficit by £28m to £265m.

Deficit contributions of £32m were made to the Plan during the year. Under the latest agreed recovery plan the Group will contribute £26m for each of the next two years and £32m per annum for the following seven years ending 31 March 2020. 

Charges

The Group accounts for pension costs under IAS 19, Employee benefits. The total charge to the income statement in respect of defined benefit schemes increased to £20.4m (2010: £13.9m), comprising total service cost of £5.7m (2010: £5.5m) and net finance cost of £14.7m (2010: £15.1m). The prior year charge benefited from curtailment and settlement gains of £2.6m and £2.3m (net) respectively and an additional top up payment of £1.8m to the Railways Pension Scheme to ensure full funding for protected members affected by a TUPE transfer. The charge relating to defined contribution schemes decreased to £32.1m (2010: £33.5m) following a reduction in the number of members.

IAS 19 valuation and accounting treatment

The Group determines pension scheme funding with reference to actuarial valuations, but for reporting purposes uses IAS 19. Under IAS 19, the Group recognised a much decreased retirement benefit liability of £337.8m at 31 March 2011 (2010: £440.0m) due to a strong performance of the schemes' assets, coupled with a significant reduction in the schemes' liabilities, partially due to the Railways Pension Scheme amending its inflationary pension increases to be based on CPI rather than RPI as a result of the UK Government's announcement on public sector pensions. The Atkins Pension Plan is unaffected by this change. The actuarial gain recognised through the Group's statement of comprehensive income amounted to £57.9m (2010: £119.7m loss).

Cash

Net funds at 31 March 2011 were £123.3m (2010: £302.5m), made up as follows:

Cash generated from continuing operations was £68.5m (2010: £126.5m), representing 64% of operating profit, and can be summarised as follows:

During the year we continued to optimise the cash position on our contracts. However, as expected, the transition to public sector infrastructure work in the Middle East and the expansion of our activities in North America have driven an increase in working capital of £37.2m.

The movement in provisions is mainly due to the one-off release of residual provisions within our asset management business.

Net tax paid amounted to £12.3m (2010: £18.0m).

Net capital expenditure in the year, including the purchase of computer software licences, amounted to £11.6m (2010: £10.8m). The year on year increase was due to the expansion of our activities in North America.

No shares were bought back during the year in respect of the share buyback programme (2010: Nil).

Capital structure

As at 31 March 2011, the Group had shareholders' funds of £16.3m (2010: deficit £84.9m) and the Company had shareholders' funds of £147.4m (2010: £136.7m).

The Company had 104.5m fully paid ordinary shares in issue at 31 March 2011 (2010: 104.5m).

Treasury policies 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 policies and authority levels for treasury activities.

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, in order to manage foreign exchange risk on material commercial transactions undertaken in currencies other than the local functional currency. The Group does not trade in financial instruments.

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, along with the risks arising from the financing of the Group's activities in the Public Private Partnership (PPP) and Private Finance Initiative (PFI) sectors.

The Group funds its ongoing activities through cash generated from its operations and, where necessary, bank borrowings and finance leases. Utilisation of the Group's facilities is a consequence of the PBSJ acquisition, in addition to letters of credit issued in respect of individual projects undertaken by the Group's operating businesses. As at 31 March 2011 the Group had £88.8m undrawn committed borrowing facilities available (2010: £87.0m).

There have been no significant changes to the Group's treasury policies during the year.

16 June 2011

Consolidated Income Statement for the year ended 31 March 2011

Notes 1 to 15 below form part of the preliminary financial information.

Consolidated Statement of Comprehensive Income for the year ended 31 March 2011

Items in the statement above are disclosed net of tax. The income tax relating to each component of other comprehensive income is disclosed in note 7c.

Notes 1 to 15 below form part of the preliminary financial information.

Consolidated Balance Sheet as at 31 March 2011

Notes 1 to 15 below form part of the preliminary financial information.

Consolidated Cash Flow Statement for the year ended 31 March 2011

Notes 1 to 15 below form part of the preliminary financial information.

Consolidated Statement of Changes in Equity as at 31 March 2011

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

Notes 1 to 15 below form part of the preliminary financial information.

Notes to the preliminary financial information for the year ended 31 March 2011

1. Basis of preparation and accounting policies

The financial information attached has been extracted from the audited Financial Statements for the year ended 31 March 2011, and has been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU and International Financial Reporting Interpretations Committee (IFRIC) interpretations issued and effective at the time of preparing those Financial Statements.

The financial information for the years ended 31 March 2011 and 31 March 2010 does not constitute summary financial information or statutory financial information as defined in Section 434 and Section 428 of the Companies Act 2006 for those years. The Annual Report and Financial Statements for the year ended 31 March 2011 were approved by the Board of directors on 15 June 2011, together with this announcement, but have not yet been delivered to the Registrar of Companies. 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 2010 have been delivered to the registrar.

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

2. Segmental information

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

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

Following the acquisition of The PBSJ Corporation during the year, the Group amended its operating segments for management purposes from those reflecting its key markets and service offerings to those reflecting predominantly its key geographical markets. The segments are: UK; North America; Middle East; Asia Pacific and Europe; and Energy. The segmental results for the comparative period to 31 March 2010 have been re-presented in line with these revised segments.

Revenue and results

Unallocated central costs include £8.0m of acquisition costs and £3.7m of intangible asset amortisation relating to the acquisition of The PBSJ Corporation. (2010: £2.6m relating to the pension curtailment gain).

Total segment revenue excludes the share of joint venture revenue earned from centrally managed joint ventures of £11.5m (2010: £12.1m).

3. Discontinued operations

In the prior year, following the expiry of a letter of credit issued in respect of the Metronet Enterprise (which went into PPP administration on 18 July 2007), the Group released a related provision and a one-off, non-cash credit of £25.0m was reflected in the Group's full year income statement. There was no related tax charge.

4. Profit on disposal of joint venture

In the prior year, the Group disposed of its holding in Transaction Systems Ltd generating a profit on disposal of £0.1m.

5. Joint ventures

Share of post-tax loss from joint ventures

6. Net finance cost

7. Income tax expense

a) Analysis of charge in the year

b) Factors affecting income tax expense

The normalised income tax expense for the year is lower (2010: lower) than the standard rate of corporation tax in the UK of 28% (2010: 28%). The differences are explained below:

c) Income tax on components of other comprehensive income

8. Dividends

The proposed final dividend is subject to approval by shareholders at the annual general meeting and has not been included as a liability in this preliminary financial information.

9. Earnings per share (EPS)

Basic earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of shares in issue during the year, excluding shares held by the Employee Benefit Trusts (EBTs), which have not unconditionally vested in the employees, and shares in treasury.

Diluted earnings per share is the basic earnings per share after allowing for the dilutive effect of the conversion into ordinary shares of the number of options outstanding during the year. The options relate to discretionary employee share plans.

Reconciliations of the earnings and weighted average number of shares used in the calculations are set out below:

10. Business combinations

The Group has made several acquisitions during the year. The initial accounting for these business combinations has been determined provisionally by the end of the first reporting period and the Group has therefore accounted for the combinations using provisional values. Adjustments to these provisional values will be made within one year of the date of acquisition relating to facts and circumstances that existed at the acquisition date.

The PBSJ Corporation

On 1 October 2010, the Group acquired The PBSJ Corporation (PBSJ). PBSJ is one of America's leading providers of engineering planning, architecture, construction, environmental and programme management services. At the date of acquisition, PBSJ had approximately 3,100 employees and more than 80 offices across the United States.

The Group acquired 100% of the issued share capital of PBSJ. This followed the passing of a resolution required for the acquisition of PBSJ by holders of over 97% of PBSJ's capital stock eligible to vote, with approximately 99% of votes cast in favour. The Group paid $17.137 for each share of PBSJ stock, which was not publicly traded but held only by employees and directors of the company.

The acquisition met the strategic objectives of the Group by expanding the business in geographies outside the UK, forming part of its plans to grow through a multi-skill, multi-local strategy. The acquisition gives the Group a strong platform for growth in the US and the ability to drive significant value for its shareholders.

The goodwill of £126.4m ($199.7m) arising from the acquisition is attributable to workload and long-established market position which will enhance the Group. None of the goodwill recognised is expected to be deductible for income tax purposes.

Total consideration was made up as follows:

Fair value amounts recognised as of the acquisition date for each major class of assets and liabilities are assumed as follows:

The fair value of trade and other receivables is $182.9m (£115.8m) and includes trade receivables of $93.7m (£58.4m). The gross contractual amount for trade receivables due is $97.0m (£60.5m), of which $3.3m (£2.1m) is expected to be uncollectible.

As at the acquisition date, there were various legal proceedings pending against PBSJ where plaintiffs alleged damages resulting from PBSJ's services. The claims are due to negligence, contributory negligence or breach of contract. PBSJ had accruals of approximately $4.2m for potential and existing claims in its balance sheet at 30 September 2010. The accrual at 31 March 2011 increased to $5.6m.

Prior to the acquisition, the Audit Committee of the Board of directors of PBSJ undertook an internal investigation to determine whether any laws, including the Foreign Corrupt Practices Act (FCPA), had been violated in connection with certain projects undertaken by PBS&J International, Inc. (one of PBSJ's subsidiary undertakings). The investigation suggested that FCPA violations may have occurred but did not extend beyond the International operation and that none of PBSJ's executive management were involved in criminal conduct. PBSJ voluntarily disclosed this matter to the Department of Justice and to the SEC and is cooperating fully with their review. The FCPA provides for penalties, criminal and civil sanctions and other remedies. Both at the date of acquisition and subsequently at 31 March 2011, management was unable to estimate the potential penalties that may be imposed and therefore no provision had been made at the date of acquisition or at 31 March 2011. It was not considered possible to determine an accurate estimate of the fines and penalties imposed as they are not formula driven or in any way the result of a predefined calculation. The Group does not have an estimate of when this will be resolved but it is considered unlikely to be within the next financial year.

As at the date of acquisition, PBSJ was self-insured up to a certain limit for costs associated with general liability, workers' compensation and employee health coverage. PBSJ also maintained a stop- loss insurance policy with a third-party insurer to limit its exposure to individual and aggregate claims made. At 30 September 2010 PBSJ had total self-insurance accruals reflected in the balance sheet of $2.2m.

The revenue included in the Group's Consolidated Statement of Comprehensive Income since 1 October 2010 contributed by PBSJ was £227.9m. PBSJ also contributed profit before tax of £10.3m over the same period.

Had PBSJ been consolidated from 1 April 2010, the Group's Consolidated Statement of Comprehensive Income would show revenue of £1,783.0m and profit of £94.7m (excluding acquisition -related expenses).

Acquisition costs of £8m have been expensed in the income statement during the year in relation to the acquisition of PBSJ.

Gimsing & Madsen

On 4 November 2010, the Group acquired Gimsing & Madsen. Gimsing & Madsen, based in Horsens in Denmark, is a Danish bridge engineering company. At the date of acquisition the company employed 20 staff with specialist skills in bridge and structural design.

The Group acquired 100% of the share capital of Gimsing & Madsen. The acquisition boosts the Group's capability in bridge and tunnelling design and improves its ability to respond to opportunities in a strong Scandinavian road and rail sector.

The goodwill of £1.7m (DKK 14.2m) arising from the acquisition is attributable to economies of scale expected from combining the operation of the company and the Group. None of the goodwill recognised is expected to be deductible for income tax purposes.

The Group agreed to acquire the entire share capital of Gimsing & Madsen for DKK 23.8m (£2.8m) to be settled in two parts. The first part on completion with cash consideration of DKK 15.9m (£1.8m) and the remaining balance withheld as security for the sellers' obligations. This deferred element is contingent on the continued employment of the sellers and has therefore been treated as an employee benefit cost going forward and is not included in the overall consideration amount.

The sale and purchase agreement also contained a clause allowing the purchase price to be adjusted from the agreed DKK 23.8m based on the level of working capital of Gimsing & Madsen at the date of acquisition. The consideration was increased subsequently by DKK 4.2m (£0.5m) to reflect the additional working capital over the anticipated amount acquired.

Total consideration was made up as follows:

Fair value amounts recognised as of the acquisition date for each major class of assets and liabilities are assumed as follows:

The fair value of trade and other receivables is DKK 7.3m (£0.8m) and includes trade receivables of DKK 3.6m (£0.4m). The gross contractual amount for trade receivables due is DKK 3.6m (£0.4m), none of which is expected to be uncollectible.

There were no contingent liabilities at the date of acquisition.

The revenue included in the Group's Consolidated Statement of Comprehensive Income since 4 November 2010 contributed by Gimsing & Madsen was £0.9m. Gimsing & Madsen also contributed negligible profit before tax after integration and transition costs.

Had Gimsing & Madsen been consolidated from 1 April 2010, the Group's Consolidated Statement of Comprehensive Income would show revenue of £1,566.0m and profit before tax of £91.4m.

Technical Services Scotland

On 11 March 2011, the Group acquired the Technical Services Scotland (TSS) consultancy and technical support team from RWE npower's Bellshill Technical Services Group.

The team comprised 29 consultants bringing expertise in electrical and process engineering, control and instrumentation, metallurgy and site based testing and diagnostics for power generation facilities.

The Group entered into an agreement to purchase the business and assets with a view to carrying on the business as a going concern.

The skills of TSS, when added to the Group's strength in power sector mechanical, structural and civil engineering, provides the Group with an even stronger platform from which to grow in the Energy sector. The acquisition of complementary skills enables the Group to offer clients a complete asset condition review and helps to place it at the forefront of other developing energy technologies that will form part of the future power generation mix.

The goodwill of £0.6m arising from the acquisition is attributable to the extensive complementary skills which enabled the Group's combined operations to provide an enhanced offering to clients. The goodwill recognised is expected to be deductible for income tax purposes over a 25 year period.

The Group paid £0.8m for the business and assets of TSS.

Total consideration was made up as follows:

Fair value amounts recognised as of the acquisition date for each major class of assets and liabilities are assumed as follows:

There were no contingent liabilities as at the date of acquisition that were relevant to the continuing business.

The revenue included in the Group's Consolidated Statement of Comprehensive Income since 11 March 2011 contributed by the business of TSS was £0.1m. The business also suffered a loss of £0.1m over the same period after paying one-off staff retention incentive packages and incurring transition costs resulting from becoming part of the Group.

Had the business of TSS been included from 1 April 2010, the Group's Consolidated Statement of Comprehensive Income would show revenue of £1,567.6m and profit before tax of £91.3m.

Pöyry Pty Ltd, Pöyry Energy Ltd and Pöyry Energy A/S

After the balance sheet date, on 3 June 2011, the Group acquired the oil and gas competence line of Pöyry plc for cash consideration of €17.3m (approximately £15.4m). The acquisition includes the integration of 130 staff across three locations: Aberdeen, Stavanger (Norway) and Perth (Australia).

The transaction included purchasing the entire share capital of Pöyry Pty Ltd (Perth, Australia), Pöyry Energy Ltd (Aberdeen, UK) and Pöyry Energy A/S (Stavanger, Norway).

The acquisition expands the Group's service offering in the oil and gas sector and provides a platform from which to grow in the world's major oil and gas centres. In particular, the acquisition provides increased access to significant gas developments and the liquefied natural gas market in Western Australia.

As the Pöyry companies were acquired on 3 June 2011, no revenue or profit or loss relating to the businesses has been included in the Group's Consolidated Statement of Comprehensive Income.

The information given above for the Pöyry companies has been given as the acquisition occurred after the reporting period but before these Financial Statements were signed and authorised for issue. At the time that these financial statement were signed and authorised for issue the initial accounting for the business combination was incomplete. As a result, disclosures around the opening balance sheet, goodwill, fair value adjustments and preacquisition income statement have not been made.

11. Post-employment benefit liabilities

The Group's post-employment benefit liabilities are analysed below:

(a) Retirement benefit liabilities

The Group operates both defined benefit and defined contribution pension schemes. The two main defined benefit schemes are the Atkins Pension Plan and the Railways Pension Scheme, both of which are funded final salary schemes. The assets of both schemes are held in separate trustee- administered funds. Other pension schemes include the Atkins McCarthy Pension Plan in the Republic of Ireland, which is a final salary funded defined benefit scheme, and a range of defined contribution schemes or equivalent.

The UK Government announced on 8 July 2010 that the private sector pension schemes should be able to link inflationary pension increases to the Consumer Price Index (CPI) rather than the Retail Price Index (RPI).

For the Railways Pension Scheme, the rules of the scheme imply that the move from RPI to CPI would impact the increases granted to pensions in payment and to increases granted to deferred pensions. Calculations for the Railways Pension Scheme are therefore based on a CPI-based inflation assumption. The effect of this change is to reduce liabilities by £27m.

The Atkins Pension Plan continues to apply RPI for the purpose of indexation.

In the previous year, on 1 September 2009, the terms of the Railways Pension Scheme were amended to offer two options regarding future benefits. The options were to receive future benefits linked to final salary in exchange for higher contributions or to receive future benefits linked to salary as at 1 September 2009 with future increases capped at inflation. This resulted in a curtailment gain being reflected in the income statement of the Group.

Also during the prior year, as a result of a TUPE transfer, 49 members transferred out of the Atkins section of the Railways Pension Scheme. The bulk of the assets were transferred in January 2010 and the liabilities in respect of transferring members were valued at 31 December 2009. The bulk transfer resulted in a settlement gain of £4.1m. The Group also made a top-up payment to the receiving section to ensure full funding for protected members which amounted to £1.8m. The payment was made directly to the receiving section and so did not appear in the disclosures for the Atkins section of the Railways Pension Scheme. The net gain recognised in the income statement was £2.3m.

The Atkins Pension Plan was closed to future accrual of benefits on 30 September 2007 and all members were transferred to a defined contribution section for future service where it was clear they did not enjoy a statutory or contractual right to a final salary pension. Although the service accrual under the defined benefit sections ceased for these members, the link to final salary currently remains whilst employed by Atkins Ltd (unless opting out or retiring if sooner).

The Atkins McCarthy pension scheme was closed to future accrual of benefits for members who do not enjoy a statutory or contractual right to a final salary pension. These members transferred to the Personal Retirement Savings Accounts - Ireland (PRSA - Irish Life) scheme with effect from 1 April 2009.

The defined benefit sections of all pension schemes are closed to new entrants, who are now offered membership of the defined contribution section.

The main assumptions used for the IAS 19 valuation of the retirement benefit liabilities for the Atkins Pension Plan and the Railways Pension Scheme are listed in the table below.

The actuarial tables used to calculate the retirement benefit liabilities for the Atkins Pension Plan were the Self-Administered Pension Schemes (SAPS) tables, with medium cohort improvements from 2002 to 2009 and a scaling factor of 0.85/0.90 for males/females respectively. Future improvements are based on CMI improvements with a 1.5% per annum improvement trend, based on year of use application. The Railways Pension Scheme results have been adjusted on an approximate basis to be based on the same mortality tables.

The components of the pension cost are as follows:

The expected return on plan assets is based on market expectations at the beginning of the year for returns over the entire life of the benefit obligation.

The Group expects employer contributions to be paid during the financial year to 31 March 2012 to be circa £30.0m, of which £26.0m is in relation to the funding of the actuarial deficit, and employee contributions paid to be circa £1.9m. Expected benefit payments made directly by the Group to pensioners in the financial year to 31 March 2012 are £nil.

The approximate effect on the liabilities from changes in the main assumptions used to value the liabilities are as follows:

The effect of the change in inflation on liabilities assumes a corresponding increase in salary increases and inflation-related pension increases.

(b) Other post-employment benefit liabilities

The Group operates unfunded schemes within certain of its non-UK businesses including Gratuity Schemes, Key Employee Supplemental Option Plans (KESOP) and post-retirement medical benefit schemes.

Members of the Gratuity Schemes are entitled to receive a cash gratuity on leaving the business which is dependent on their length of employment and final salary. Valuation of the gratuity obligation is carried out in line with the principles of IAS 19, Employee benefits. The comparative figures shown for the year ended 31 March 2010 relate only to this scheme.

As a result of the acquisition of The PBSJ Corporation, the Group now operates a KESOP plan providing key officers and employees with post-retirement benefits, known as a Supplemental Income Program (SIP). The SIP is an unfunded plan that provides participants with retirement income for a specified period of between 5 and 15 years upon retirement, death or disability. The plan fixes a minimum level for retirement benefits to be paid to participants based on the participants' position at the company, their age and service at retirement. Additionally, certain executive agreements have been amended to provide post-retirement medical benefits to those employees and their spouses, at a level substantially similar to those medical and hospitalisation benefits paid and provided to senior executives currently employed by the company. The insurance benefits will be provided without any further or additional services from the employee to the company and they will be paid for and provided for as long as the employee and their spouse shall live.

12. Ordinary shares

On 9 September 2010 WS Atkins plc (the Company) passed a resolution adopting new Articles of Association of the Company. From 1 October 2009, the Companies Act 2006 abolished the requirement for a company to have an authorised share capital and hence the Company's new Articles of Association do not include an authorised share capital.

At the 2010 annual general meeting (AGM), shareholder authority was obtained for the Company to purchase up to a maximum of 10,011,000 of its own ordinary shares (representing approximately 10% of the issued share capital of the Company on 16 June 2010) for a period ending on the earlier of the next AGM or 9 December 2011, provided that certain conditions (relating to the purchase price) are met. The Notice of Meeting for the AGM to be held at 1630 on Thursday 8 September 2011 proposes that shareholders approve a resolution updating and renewing this authority. Shares in the Company may also be purchased by Atkins' Employee Benefit Trusts.

As at the date of this report there were 4,341,000 ordinary shares of 0.5p each (nominal value £21,705) held as treasury shares. No shares were purchased during the year ended 31 March 2011 (2010: nil). The 4,341,000 treasury shares, which represent approximately 4.2% of the total (2010: 4.2%) of the called-up share capital as at the date of this report, have not been cancelled and represent a deduction from shareholders' equity.

13. Cash generated from continuing operations

14. Analysis of net funds