Half Year Results

26th Nov 2008 07:00



Half year financial report for the six months ended 30 September 2008

Professional services group WS Atkins plc (Atkins) today announces unaudited results for the six months ended 30 September 2008. The Group reports strong half year results, continued confidence for the remainder of this year and a secure position from which to respond to the challenges and opportunities further ahead.

FINANCIAL SUMMARY

		Six months to	Six months to	Increase /
		30 Sept 2008	30 Sept 2007	(Decrease)
Income statement - continuing operations
Revenue		£710.8m	£633.8m	12%
Operating profit		£48.2m	£40.1m	20%
Operating margin		6.8%	6.3%	0.5pp
Normalised profit before taxation	a	£47.5m	£42.7m	11%
Normalised profit after taxation	a	£36.3m	£31.7m	15%
Normalised diluted earnings per share	a	36.4p	30.8p	18%
Income statement - total
Profit for the period		£38.8m	£63.1m	(39)%
Diluted earnings per share		39.0p	61.3p	(36)%
Dividend	b	8.75p	7.50p	17%
People
Staff numbers at 30 September	c	18,322	16,909	8%
Average staff numbers	c	17,713	16,384	8%
Cash
Net funds	d	£164.5m	£128.3m	28%

Highlights

Notes:

a. Normalised profit and earnings exclude profit on disposal of Joint Ventures (2008) and discontinued activities (2007).

b. Interim dividend declared for six months to 30 September.

c. Staff numbers are shown for continuing operations and on a full-time equivalent basis, including agency staff.

d. Net funds comprise cash and cash equivalents plus financial assets and loan notes receivable less borrowings.

Commenting on the results, Keith Clarke, Chief Executive of Atkins, said:

"These are strong results. Whilst we remain attuned to the wider economic situation, the range of our business and its strength in depth gives us continued confidence for the remainder of this year. Looking further ahead, our secure position allows us to continue to invest in Carbon Critical Design and our focus on excellence has positioned the Group to respond with confidence to the challenges and opportunities ahead."

Enquiries

Atkins
Keith Clarke, Chief Executive	+ 44 (0) 1372 726140
Robert MacLeod, Group Finance Director	+ 44 (0) 1372 726140
Sara Lipscombe, Group Communications Director	+ 44 (0) 1372 726140
Smithfield
Lucinda Kemeny	+44 (0) 20 73604900

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, the largest multidisciplinary consultancy in Europe, and the world's eighth largest global design firm (sources: New Civil Engineer Consultants File, 2008; Engineering News Record, 2008).

2. Attachments

Attached to this announcement are: the overview of the period, business review, finance review, statement of directors' responsibilities, the unaudited: consolidated income statement, consolidated balance sheet, consolidated cash flow statement, consolidated statement of recognised income and expense and notes to the condensed consolidated half year financial information.

3. Analyst Presentation

A presentation for analysts will be held at 8:30am today at JPMorgan Cazenove, 20 Moorgate, London EC2R 6DA.  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 half year financial information has been prepared for the shareholders of the Company, 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.  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 announcement. 

The report 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

Results

The Group has had a strong first half. Revenue has grown by 12% to £710.8m and, as anticipated, operating margins have increased significantly from 6.3% to 6.8%. Taken together, operating profit from continuing operations increased by 20% to £48.2m.

This reflects good performances across our principal business segments. The growth in revenue was particularly strong in the Middle East business with revenues in that region up 55% compared with the same period last year, but there was also solid growth in Design and Engineering Solutions and Management and Project Services. The increase in the Group's operating margin was, as anticipated, largely driven by improvements in our Rail business and the recovery of our Management Consultants business.

Normalised profit before tax grew by 11% to £47.5m, lower than the increase in operating profit due to the impact of higher pension finance costs. Normalised diluted earnings per share grew by 18% to 36.4p as the Group benefited from a lower tax charge and the impact of our share buyback programme.

The Group's cash position remains strong, with net funds at 30 September 2008 of £164.5m. The cash inflow from operations of £38.2m was significantly higher than the same period last year which was impacted by the transition of supply chain arrangements for Metronet and the effect of other new contracts.

The investments we have made in staff recruitment, training and development in recent years continue to yield benefits. As planned, our staff numbers increased by over 1,000 in the first six months of the year. At just over 18,300 people, this is 1,400 more than the same time last year.  Staff numbers have grown across the Group, particularly in the Middle East where staff numbers are up by almost 40% over last year.

Outlook

The outlook for the rest of the year for the Group remains good.  Overall, our work in hand is strong and, with 87% of full year forecast revenue secured, is ahead of the same period last year (2007: 85%).

Despite the recent slowdown of the UK economy we are not currently experiencing any material impact within our UK-based businesses overall which generate around 75% of Group revenues. Demand for the majority of our services, many of which feature high barriers to entry, remains strong. The Middle East business, which now represents more than 10% of the Group, is performing well and whilst economic growth in the region may also slow, our prospects for the remainder of the year are positive.

Looking further ahead, the Group's diversity and geographic spread equip us to weather many recession scenarios and we have an established ability to refocus resources selectively where appropriate. The majority of our work is for clients within the public and regulated sectors where infrastructure investment is publicly committed. We are well placed to continue to review opportunities to add to the depth and range of our technical skills and invest in the sustainable growth of the Group. In addition, our secure position allows us to continue to invest in Carbon Critical Design and our focus on excellence has positioned the Group to respond with confidence to the challenges and opportunities ahead.  

Dividend

The Board has continued confidence in the Group's prospects and has declared an interim dividend of 8.75p per share. The increase of 17% compared with the same period last year helps to rebalance the split between interim and anticipated final dividend. The interim dividend will be paid on 30 January 2009 to all shareholders on the register on 19 December 2008.

BUSINESS REVIEW

Design and Engineering Solutions

	Six months to	Six months to	Increase /
	30 Sept 2008	30 Sept 2007	(Decrease)
Revenue	£202.6m	£181.8m	11%
Operating profit	£16.8m	£15.7m	7%
Operating margin	8.3%	8.6%	(0.3)pp
Share of post-tax JV profit/(loss)	£0.1m	£(0.1)m	-
Work in hand	87%	83%	4pp
Staff numbers at 30 September	5,176	4,730	9%
Average staff numbers	5,057	4,580	10%

Design and Engineering Solutions performed well in the first half of the year with revenue up by 11% to £202.6m and operating profit up 7% to £16.8m.

The slight reduction in operating margin from 8.6% to 8.3% was anticipated and reflects the impact of the reorganisation of our UK regional design business which commenced late last year.

The markets in which Design and Engineering Solutions operate generally remain robust.

Outlook

The outlook for Design and Engineering Solutions remains good with secured work in hand representing 87% of the full year forecast revenue.

At present there has been no slowdown in activity in the majority of our markets and the need for our clients to continue to enhance their capital infrastructure remains. The performance and prospects within our UK regional design business, which represents approximately 10% of Design and Engineering Solutions, are more mixed although we do have the capability to redeploy staff to other projects across the world.

Highways and Transportation

	Six months to	Six months to	Increase /
	30 Sept 2008	30 Sept 2007	(Decrease)
Revenue	£133.7m	£134.0m	-
Operating profit	£8.0m	£8.0m	-
Operating margin	6.0%	6.0%	-
Share of post-tax JV profits	£0.3m	£0.3m	-
Work in hand	86%	89%	(3)pp
Staff numbers at 30 September	3,077	3,114	(1)%
Average staff numbers	2,937	3,082	(5)%

Highways and Transportation continued to perform well, in line with last year's much-improved first half, with an operating profit the same as last year of £8.0m. Revenues were broadly the same as last year, despite the loss of the Northamptonshire County Council contract, as the Group benefited from increased demand for our intelligent transport systems services, the commencement of our new Area 6 MAC contract in East Anglia for the Highways Agency and additional revenues in our Gloucestershire and Cambridgeshire contracts.

In our Highway Services business mobilisation for the Highways Agency Area 6 MAC contract, which commenced on 1 June 2008, was successfully achieved and we anticipate the rate of activity on this contract will continue to increase through the second half of the year.  In addition, we were awarded a five and a half year contract (extendable to nine and a half years) for Bath and North East Somerset which commenced in October.

Our design-related business has a strong workload, with work underway on a number of major schemes including the A14 and M74 projects secured last year. Work has commenced on developing the design solution for widening of the M25 for the Highways Agency under an advance activities agreement pending financial close on the Connect Plus DBFO contract. This is currently scheduled to occur early in 2009.

Revenue remains strong for our intelligent transport systems business, which specialises in cost-effective technology-based solutions to traffic problems such as congestion. We are working on schemes with local and regional transport authorities as well as the Highways Agency and in the last six months have been awarded a three-year extension to our transport systems contract for the Welsh Assembly.

Within our transport planning business, demand from central government and regional transport bodies remains strong for our advisory services on policy, plans, governance and funding. There has been an increase in demand for Intelligent Space, our pedestrian planning consultancy acquired last year, which has won new commissions from Transport for London and the Roads and Transport Authority in Dubai.

Outlook

The outlook for Highways and Transportation remains stable with secured work in hand representing 86% of the full year forecast revenue which is good.

Approximately 90% of Highways and Transportation revenue is derived from work for the UK public sector and a significant proportion of this is under long term contracts with good predictability of budgets for the year ahead. Whilst local authority discretionary spending may come under pressure, the demand for intelligent transport system-enabled solutions should continue to grow.

Rail

	Six months to	Six months to	Increase /
	30 Sept 2008	30 Sept 2007	(Decrease)
Revenue	£99.6m	£102.0m	(2)%
Operating profit	£7.1m	£3.9m	82%
Operating margin	7.1%	3.8%	3.3pp
Work in hand	90%	87%	3pp
Staff numbers at 30 September	1,627	1,740	(6)%
Average staff numbers	1,643	1,712	(4)%

Rail revenue was, as expected, slightly lower due to the reduced level of activity in relation to Metronet following its administration last year. There was a substantial increase in operating profit, up from £3.9m to £7.1m driven by a significantly improved operating margin of 7.1% (2007: 3.8%). This improvement in operating margin reflects the continuing recovery of our Network Rail related work and the inclusion of work for London Underground under the new contractual structure. 

A significant portion of our activity this period has been on the re-signalling of the Rugby to Nuneaton section of the West Coast Main Line where we continue to provide excellent performance which has been recognised by our client.

Our design teams are also busy, and continue work on a number of programmes including Thameslink, the Scottish electrification programme and the Network Rail Enhancement Programme where we are engaged on a number of projects to increase the capacity of the rail network.

Whilst Network Rail and London Underground represent some 80% of this segment's revenue, there is an increasing workload with the rolling stock manufacturers and leasing companies as we work with them to help introduce new fleets on some routes and extend the life of existing assets on others.

Outlook

The outlook for Rail remains good with secured work in hand representing 90% of the full year forecast revenue.

In November 2008 the Office of Rail Regulation issued a determination of the outputs and funding for Network Rail for the coming five years. This included funding of £28.5bn to incorporate a targeted programme of enhancements and renewals, areas in which we are strong. Whilst the funding for Network Rail appears secure, our performance depends upon Network Rail's timely identification and bringing to market of large re-signalling schemes in succession to the West Coast Main Line upgrade.

Middle East, China and Europe

	Six months to	Six months to	Increase /
	30 Sept 2008	30 Sept 2007	(Decrease)
Revenue	£135.0m	£87.6m	54%
Operating profit	£10.0m	£4.8m	108%
Operating margin	7.4%	5.5%	1.9pp
Work in hand	86%	78%	8pp
Staff numbers at 30 September	4,664	3,679	27%
Average staff numbers	4,329	3,440	26%

The Middle East, China and Europe segment continues to grow with results ahead of expectations and significantly ahead of the prior year.

Middle East

	Six months to	Six months to	Increase /
	30 Sept 2008	30 Sept 2007	(Decrease)
Revenue	£82.0m	£52.9m	55%
Operating profit	£8.7m	£4.6m	89%
Operating margin	10.6%	8.7%	1.9pp
Staff numbers at 30 September	2,948	2,148	37%
Average staff numbers	2,696	1,947	38%

Our Middle East business continues to grow rapidly with revenue up 55% to £82.0m and operating profit up 89% to £8.7m with operating margins of 10.6%. The business now employs almost 3,000 staff, an increase of 19% in the sixߛmonth period reflecting the continued growth in our work in hand.

Our markets across the region continue to be strong and we are able to remain selective in the projects we target. Significant project wins in the period included the design of the Dubai Silicon Oasis headquarters building; further extensions to the bridges contracts together with the masterplan for the new financial district being developed on Al Sowah Island in Abu Dhabi; and the preliminary design of the Akaria Development in Jeddah.

Work on the original Dubai Metro project contracts is nearing completion and we are continuing to work on associated projects. The work is proceeding well and we are pursuing further rail opportunities in the region.

China

	Six months to	Six months to	Increase /
	30 Sept 2008	30 Sept 2007	(Decrease)
Revenue	£19.6m	£14.5m	35%
Operating profit	£0.9m	£0.1m	800%
Operating margin	4.6%	0.7%	3.9pp
Staff numbers at 30 September	911	835	9%
Average staff numbers	869	845	3%

Results from China show a steady improvement over the prior year, driven by a surge in infrastructure projects in Hong Kong, in particular rail related work where we have won two contracts covering separate elements of the West Island Line and Express Link, and growth in our core design and urban planning work in mainland China.

Europe

	Six months to	Six months to	Increase /
	30 Sept 2008	30 Sept 2007	(Decrease)
Revenue	£33.4m	£20.2m	65%
Operating profit	£0.4m	£0.1m	300%
Operating margin	1.2%	0.5%	0.7pp
Staff numbers at 30 September	805	696	16%
Average staff numbers	764	648	18%

The results from our Europe businesses reflect an improvement over the prior year helped by another strong result from our Danish business which is continuing its work on the Copenhagen Metro and is well-positioned for rail opportunities which will be coming to market in the short to medium term. The Europe results were however impacted by a slowdown in Ireland, and another disappointing period from our Swedish business.

Outlook

The outlook for the Middle East, China and Europe segment is very good for the remainder of the year with secured work in hand representing 86% of the full year forecast revenue (2007: 78%).

Our Middle East business has a well established local presence in six countries in the region, centred on Dubai and Abu Dhabi.  The demand for our services remains strong and whilst there may be a reduction in the growth rate in Dubai, the outlook is for continued growth albeit at a reduced level. The medium-term outlook for Abu Dhabi is stronger. In addition, we continue to broaden our skill base in the region.

We continue to see strong demand for our rail and tunnelling skills as a result of the ongoing investment in the Hong Kong rail market. There is also continuing demand for our architectural and urban planning skills as the trend towards urbanisation continues in mainland China.

The outlook is more mixed across our Europe portfolio in which our two biggest businesses are in Denmark and Ireland. Our Danish business remains confident while our Irish business continues to be impacted by a slowdown in the local market.

Management and Project Services

	Six months to	Six months to	Increase /
	30 Sept 2008	30 Sept 2007	(Decrease)
Revenue	£113.3m	£103.1m	10%
Operating profit	£7.5m	£6.5m	15%
Operating margin	6.6%	6.3%	0.3pp
Work in hand	84%	83%	1pp
Staff numbers at 30 September	2,433	2,421	-
Average staff numbers	2,449	2,350	4%

Management and Project Services continues to make progress with operating profit up by 15% to £7.5m on revenue growth of 10%.

The results of this segment are mainly derived from Faithful+Gould which operates across a range of market sectors.  Revenue growth in the period has been predominantly in the energy, utilities and public sectors, which make up around half of the business, offsetting a decline in the commercial property sector (less than 10% of the business). The UK market is challenging but we are well placed to address these issues. Around a third of our US business is focussed upon the energy market which remains strong.

With the new management team in Management Consultants, the business has recovered as anticipated. A number of framework contracts, including GCHQ and the Department for Children Schools and Families, provide a good foundation for the business.

Outlook

The outlook for the Management and Project Services segment is good for the remainder of the year with secured work in hand representing 84% of the full year forecast revenue.

Our Faithful+Gould business has responded to the slowdown in activity in the UK commercial property sector. The business overall is robust due to its diversification across a number of sectors and markets that remain strong and we are well placed to assist clients in other areas as they seek to identify cost savings.

Our Management Consultants business, which typically has shorter visibility of future workload, nevertheless has work in hand that is underpinned by several long-term contracts.

Asset Management

	Six months to	Six months to	Increase /
	30 Sept 2008	30 Sept 2007	(Decrease)
Revenue	£26.6m	£25.3m	5%
Operating (loss) / profit	£(1.2)m	£1.2m	(200)%
Operating margin	(4.5)%	4.7%	(9.2)pp
Share of post-tax JV profits	-	£0.1m	(100)%
Profit on disposal of JV	£2.5m	-	-
Work in hand	90%	90%	-
Staff numbers at 30 September	708	675	5%
Average staff numbers	687	678	1%

Asset Management revenue increased by 5% to £26.6m with the mobilisation of the contract to manage the maintenance of the Home Office property portfolio. Whilst performance in the managing agent business is profitable and in line with expectations, current year remediation costs within the portfolio of long-term legacy PFI maintenance contracts where we act as managing contractor have adversely impacted the overall results of the segment.

The disposal of our interest in Modern Housing Solutions (Prime) Limited on 1 April 2008 resulted in a £2.5m profit on disposal. 

Outlook

The outlook for our managing agent business remains good as companies seek to use our services to increase the efficiency of the management of their facilities. Our focus in the short-term is on resolving the issues within the poor performing long-term legacy PFI business.

FINANCE REVIEW

The revenue and operating profit for the six months to 30 September 2008 are discussed in the preceding Business Review.

Taxation

The Group's effective normalised tax rate on continuing operations was 23.5% (2007: 25.8%) representing the benefit of the reduction in the UK corporate tax rate and the increasing proportion of the Group's profits earned in lower tax rate jurisdictions.

Pensions

Pension Costs

The cost of the Group's defined benefit pension schemes for the six months to 30 September 2008 amounted to £7.7m (2007: £11.7m).

Funding

The latest actuarial valuation of the Group's principal defined benefit scheme, the Atkins Pension Plan (the Plan), was carried out as at 1 April 2007. That valuation indicated that the Plan had an actuarial deficit of approximately £215m.  Cash contributions of £37.5m were made during the year ended 31 March 2008 to fund the deficit with a further £12.5m paid on 1 April 2008.  In addition, a commitment to contribute a further £32m per year until 2014 was agreed with the Trustees. As a consequence, total deficit funding contributions paid in the six month period to 30 September 2008 amounted to £28.5m (six months to 30 September 2007: £25m).

At 30 September 2007 the defined benefit section of the Plan was closed to future accrual of benefit for members who did not enjoy a statutory or contractual right to a final-salary pension.  These members transferred to a defined contribution section.

The latest actuarial valuation of the Atkins section of the Railways Pension Scheme as at 31 December 2007 is under way.

IAS 19

The IAS 19 retirement liability of the Group's pension schemes, before deferred tax, is estimated at £209m (30 September 2007: £158m; 31 March 2008: £213m).  Although the value of the schemes' assets decreased substantially in the six month period to 30 September 2008, the IAS19 deficit decreased by £4m due to the increase in the discount rate used from 6.5% to 6.9% and the benefit of the funding contributions described above.

One of the key assumptions within the IAS 19 valuation is the discount rate which is calculated with reference to the average yield on long-dated, AA-rated corporate bonds. As a consequence of the 'credit crunch', the yield on such instruments has increased significantly over the last eighteen months and the discount rate has increased correspondingly from 5.35% at 31 March 2007 to 6.90% at 30 September 2008. The increase has had the effect of reducing the present value of pension fund liabilities.  The effect of a future decrease in discount rates of ten basis points would be to increase liabilities before deferred tax by approximately £20m.

Since 30 September, there have been further substantial declines and increased volatility in worldwide equity markets. It is not possible to predict the future movement in equity valuations but the impact of a 10% fall in the value of the Group's equity portfolio, which made up some 52% of the pension schemes' assets at 30 September, would be to increase the IAS19 deficit before deferred tax by approximately £40m, all other assumptions remaining constant.

The key assumptions used in the IAS 19 valuation and their sensitivities are detailed in note 13 to this half year financial information.

Earnings per share (EPS)

Normalised diluted EPS increased by 18% to 36.4p as a result of the Group's increased profit before tax of 11%, the lower tax rate and our ongoing share buyback programme.

Basic EPS for the period was 39.5p (2007: 62.2p), and diluted EPS was 38.8p (2007: 61.3p).  

Net funds

Net funds are analysed as follows:

£million	30 Sept 2008	30 Sept 2007	31 March 2008
Cash and cash equivalents	136.5	138.9	154.5
Loan notes receivable	12.7	-	5.6
Financial assets at fair value through profit & loss	33.2	26.6	29.7
Borrowings due within one year	(1.2)	(3.5)	(4.2)
Borrowings due after one year	(2.9)	(20.7)	(3.2)
Finance leases	(13.8)	(13.0)	(14.0)
Net funds	164.5	128.3	168.4

The Group's treasury policies and financial risk management remain as described in the 31 March 2008 Annual Report. In addition to the net funds above, the Group has £74.2m (2007: £43.2m) of undrawn committed borrowing facilities available to fund its operations as disclosed in note 12 to this condensed consolidated half year financial information.

Cash flow

The Group's cash flow in the period was strong with cash generated from operations of £38.2m (2007: cash used in operations £16.8m). This was due to improved management of working capital compared to the same period last year which included an extension of payment terms from Metronet in the aftermath of its entry into administration and the effect of other new contracts. Further analysis is disclosed within note 16 of this condensed consolidated half year financial information.

Risk

The Group considers strategic, financial and operational risks and identifies actions to mitigate those risks.  Key risks and their mitigation have not changed in the period from those disclosed in the 31 March 2008 Annual Report.

As previously disclosed, change in the economic environment is one of the principal key risks for the Group and we remain vigilant to the potential impacts of the 'credit crunch' and a recession within our major markets.

DIRECTORS

As disclosed in the 31 March 2008 Annual Report, Dr Raj Rajagopal was appointed a non-executive director of WS Atkins plc on 24 June 2008. There have been no other changes to the Board of directors during the period or subsequently.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors confirm that this condensed consolidated half year financial information has been prepared in accordance with IAS 34, as adopted by the European Union, and that the half year management report includes a fair review of the information required by DTR 4.2.7 and DTR 4.2.8.

By order of the Board

Richard Webster

Company Secretary

26 November 2008

Consolidated income statement for the six months ended 30 September 2008 (unaudited)

		Six months to	Six months to	Year to
		30 Sept 2008	30 Sept 2007	31 March 2008
Notes		£m	£m	£m
Revenue (Group and share of Joint Ventures)		738.9	665.8	1,399.5
Revenue	4	710.8	633.8	1,313.6
Cost of sales		(443.6)	(411.7)	(834.1)
Gross profit		267.2	222.1	479.5
Administrative expenses		(219.0)	(182.0)	(392.8)
Operating profit	4	48.2	40.1	86.7
Profit on disposal of Joint Venture	5	2.5	-	-
Share of post-tax profit from Joint Ventures	6	0.4	0.3	0.9
Profit from operations		51.1	40.4	87.6
Finance income	7	3.4	5.0	9.8
Finance cost	7	(4.5)	(2.7)	(5.5)
Net finance (cost) / income	7	(1.1)	2.3	4.3
Profit before taxation		50.0	42.7	91.9
Income tax expense	8	(11.2)	(11.0)	(23.3)
Profit for the period from continuing		38.8	31.7	68.6
operations
Discontinued operations	9	-	31.4	31.4
Profit for the period	15	38.8	63.1	100.0
attributable to equity shareholders
Earnings per share
From continuing and discontinued
operations (total)
Basic earnings per share	11	39.7p	62.2p	98.9p
Diluted earnings per share	11	39.0p	61.3p	97.2p
From continuing operations
Basic earnings per share	11	39.7p	31.3p	67.9p
Diluted earnings per share	11	39.0p	30.8p	66.7p
Dividends
Dividends recognised in the period - paid	10	16.5p	14.0p	21.5p
Dividends relating to the period - proposed	10	8.75p	7.5p	24.0p

The notes below form an integral part of this condensed consolidated half year financial information.

Consolidated balance sheet as at 30 September 2008 (unaudited)

		30 Sept 2008	30 Sept 2007	31 March 2008
	Notes	£m	£m	£m
Assets
Non-current assets
Goodwill		57.3	49.3	56.7
Other intangible assets		13.5	6.1	10.9
Property, plant and equipment		43.6	43.4	45.6
Investments in Joint Ventures		3.5	2.8	4.2
Deferred income tax assets		68.6	59.0	69.6
Other receivables		12.7	5.4	5.7
		199.2	166.0	192.7
Current assets
Inventories		0.3	0.5	0.3
Trade and other receivables		337.5	300.2	299.7
Financial assets at fair value through profit or loss		33.2	26.6	29.7
Cash and cash equivalents		136.5	138.9	154.5
		507.5	466.2	484.2
Liabilities
Current liabilities
Borrowings	12	(5.5)	(7.0)	(7.8)
Trade and other payables		(450.8)	(365.9)	(415.4)
Derivative financial instruments		(0.4)	-	(0.9)
Current income tax liabilities		(25.6)	(23.9)	(26.8)
Provisions for other liabilities and charges		(5.4)	(7.7)	(4.3)
		(487.7)	(404.5)	(455.2)
Net current assets		19.8	61.7	29.0
Non-current liabilities
Borrowings	12	(12.4)	(30.2)	(13.6)
Provisions for other liabilities and charges		(13.5)	(12.7)	(13.5)
Retirement benefit liabilities	13	(208.6)	(158.0)	(213.1)
Other non-current liabilities		(4.9)	(4.3)	(4.9)
		(239.4)	(205.2)	(245.1)
Net (liabilities) / assets		(20.4)	22.5	(23.4)
Capital and reserves
Ordinary shares	14,15	0.5	0.5	0.5
Share premium account	15	62.4	62.4	62.4
Merger reserve	15	8.9	8.9	8.9
Retained loss	15	(92.2)	(49.3)	(95.2)
Equity shareholders' (deficit) / funds		(20.4)	22.5	(23.4)

The notes below form an integral part of this condensed consolidated half year financial information.

Consolidated cash flow statement for the six months ended 30 September 2008 (unaudited)

		Six months to	Six months to	Year to
		30 Sept 2008	30 Sept 2007	31 March 2008
	Notes	£m	£m	£m
Cash flows from operating activities
Cash generated from / (used in) operations	16	38.2	(16.8)	80.9
Interest received		3.2	5.0	9.7
Interest paid		(1.0)	(1.5)	(3.3)
Income tax paid		(5.1)	(14.0)	(14.7)
Discontinued operations	9	-	3.5	0.3
Net cash generated from / (used in)		35.3	(23.8)	72.9
operating activities
Cash flows from investing activities
Distributions received from Joint Ventures		1.2	0.3	2.5
Investments in Joint Ventures		-	(0.4)	(0.9)
Loans to Joint Ventures		(7.6)	-	-
Repayments of loans from Joint Ventures		0.5	-	-
Acquisition of subsidiaries
- Consideration		(0.2)	(0.8)	(6.4)
- Cash acquired		-	0.2	0.7
Purchases of property, plant and equipment		(7.7)	(9.3)	(18.9)
Proceeds from disposals of property, plant		0.5	0.4	1.0
and equipment
Proceeds from disposal of Joint Venture		2.5	-	-
Financial assets		(3.5)	23.0	19.9
Purchases of intangible assets		(6.9)	(3.5)	(7.8)
Discontinued operations	9	-	(17.3)	(17.3)
Net cash used in investing activities		(21.2)	(7.4)	(27.2)
Cash flows from financing activities
Repayment of short-term loans		(3.5)	-	(0.2)
Repayment of long-term loans		-	-	(17.6)
Finance lease principal payments		(2.0)	(1.9)	(4.4)
Share buyback		(12.3)	-	(34.0)
Equity dividends paid to shareholders		(16.1)	(14.0)	(21.8)
Discontinued operations	9	-	(0.3)	(0.3)
Net cash used in financing activities		(33.9)	(16.2)	(78.3)
Net decrease in cash, cash		(19.8)	(47.4)	(32.6)
equivalents and bank overdrafts
Cash, cash equivalents and bank overdrafts		154.5	187.7	187.7
at beginning of period
Exchange movements		1.8	(1.4)	(0.6)
Cash, cash equivalents and bank		136.5	138.9	154.5
overdrafts at end of period

The notes below form an integral part of this condensed consolidated half year financial information.

Consolidated statement of recognised income and expense for the six months ended 30 September 2008 (unaudited)

			Six months to	Six months to	Year to
			30 Sept 2008	30 Sept 2007	31 March 2008
	Notes		£m	£m	£m
Actuarial (loss) / gain on retirement benefit	13		(20.7)	72.0	6.4
liabilities
Share of Joint Venture equity items			-	(0.2)	0.2
Tax on items charged to equity			5.8	(24.2)	(7.8)
Cash flow hedges			-	-	(0.8)
Net differences on exchange			1.8	(0.6)	3.3
Net (expense)/ income recognised directly to equity			(13.1)	47.0	1.3
Profit for the period			38.8	63.1	100.0
Total recognised income and expense for			25.7	110.1	101.3
the period attributable to equity shareholders

The notes below form an integral part of this condensed consolidated half year financial information. 

Notes to the condensed consolidated half year financial information for the six months ended 30 September 2008 (unaudited)

1.General Information

WS Atkins plc is a public limited company incorporated and domiciled in England with company number 1885586. The Company has its primary listing on the London Stock Exchange.

Copies of this half year report are available from the registered office: Woodcote Grove, Ashley Road, Epsom, Surrey, KT18 5BW, England, and may be viewed on the Atkins website www.atkinsglobal.com.

This condensed consolidated half year financial information was approved for issue on 26 November 2008.  It has not been audited or reviewed by the Group's independent auditors.

This half year financial information does not comprise statutory accounts within the meaning of Section 240 of the Companies Act 1985. Statutory accounts for the year ended 31 March 2008 were approved by the Board of directors on 25 June 2008 and delivered to the Registrar of Companies. The report of the auditors on those accounts was unqualified, did not contain an emphasis of matter paragraph and did not contain any statement under Section 237 of the Companies Act 1985.

2. Basis of preparation

This condensed consolidated half year financial information for the six months ended 30 September 2008 has been prepared in accordance with the Disclosure and Transparency Rules of the Financial Services Authority and with IAS 34, 'Interim financial reporting' as adopted by the European Union. The condensed consolidated half year financial information should be read in conjunction with the annual financial statements for the year ended 31 March 2008, which have been prepared in accordance with EU-Adopted International Financial Reporting Standards (IFRSs), IFRIC interpretations and the Companies Act 1985 applicable to companies reporting under IFRS.

3. Accounting policies

The accounting policies adopted are consistent with those of the annual financial statements for the year ended 31 March 2008, as described in those annual financial statements.  There have been no new standards or interpretations adopted.

4. Segmental reporting - business segments

						Share of
						post-tax
						profit
		Inter-		Operating		from
	Total	segment		profit /	Operating	Joint
Six months to	revenue	revenue	Revenue	(loss)	margin	Ventures
30 September 2008	£m	£m	£m	£m	%	£m
Design and Engineering Solutions	212.0	(9.4)	202.6	16.8	8.3%	0.1
Highways and Transportation	143.3	(9.6)	133.7	8.0	6.0%	0.3
Rail	108.1	(8.5)	99.6	7.1	7.1%	-
Middle East, China and Europe	150.3	(15.3)	135.0	10.0	7.4%	-
Management and Project Services	118.5	(5.2)	113.3	7.5	6.6%	-
Asset Management	27.7	(1.1)	26.6	(1.2)	(4.5)%	-
Total continuing segments	759.9	(49.1)	710.8	48.2	6.8%	0.4
Discontinued operations	-	-	ߛ	-	-	-
Total	759.9	(49.1)	710.8	48.2	6.8%	0.4

						Share of
						post-tax
						profit /
						(loss)
		Inter-				from
	Total	segment		Operating	Operating	Joint
Six months to	revenue	revenue	Revenue	profit	margin	Ventures
30 September 2007	£m	£m	£m	£m	%	£m
Design and Engineering Solutions	189.9	(8.1)	181.8	15.7	8.6%	(0.1)
Highways and Transportation	140.5	(6.5)	134.0	8.0	6.0%	0.3
Rail	113.0	(11.0)	102.0	3.9	3.8%	-
Middle East, China and Europe	96.6	(9.0)	87.6	4.8	5.5%	-
Management and Project Services	107.9	(4.8)	103.1	6.5	6.3%	-
Asset Management	26.3	(1.0)	25.3	1.2	4.7%	0.1
Total continuing segments	674.2	(40.4)	633.8	40.1	6.3%	0.3
Discontinued operations	33.3	(0.1)	33.2	17.0	51.2%	-
Total	707.5	(40.5)	667.0	57.1	8.6%	0.3

						Share of
						Post-tax
						profit
		Inter-				from
	Total	segment		Operating	Operating	Joint
	revenue	revenue	Revenue	profit	margin	Ventures
Year to 31 March 2008	£m	£m	£m	£m	%	£m
Design and Engineering Solutions	390.8	(17.2)	373.6	30.2	8.1%	-
Highways and Transportation	291.6	(17.0)	274.6	16.8	6.1%	0.7
Rail	224.9	(16.7)	208.2	11.9	5.7%	-
Middle East, China and Europe	206.5	(14.9)	191.6	11.4	5.9%	-
Management and Project Services	223.5	(10.3)	213.2	13.6	6.4%	-
Asset Management	54.7	(2.3)	52.4	2.8	5.3%	0.2
Total continuing segments	1,392.0	(78.4)	1,313.6	86.7	6.6%	0.9
Discontinued operations	33.3	(0.1)	33.2	17.0	51.2%	-
Total	1,425.3	(78.5)	1,346.8	103.7	7.7%	0.9

Reconciliation of segmental analysis to profit for the period attributable to equity shareholders:

	Six months to	Six months to	Year to
	30 Sept 2008	30 Sept 2007	31 March 2008
	£m	£m	£m
Operating profit	48.2	40.1	86.7
Profit on disposal of Joint Venture	2.5	-	-
Share of post-tax profit from Joint Ventures	0.4	0.3	0.9
Profit from operations	51.1	40.4	87.6
Finance income	3.4	5.0	9.8
Finance cost	(4.5)	(2.7)	(5.5)
Net finance (cost) / income	(1.1)	2.3	4.3
Profit before taxation	50.0	42.7	91.9
Income tax expense	(11.2)	(11.0)	(23.3)
Profit for the period from continuing	38.8	31.7	68.6
operations
Discontinued operations	-	31.4	31.4
Profit for the period attributable to equity	38.8	63.1	100.0
shareholders

The £2.5m profit on disposal of Joint Venture is attributable to the Asset Management segment.

5. Profit on disposal of Joint Venture

On 1 April 2008 the Group disposed of its holding in Modern Housing Solutions (Prime) Limited generating a profit on disposal of £2.5m.

6. Share of post-tax profit/(loss) from Joint Ventures

		Continuing	Discontinued	Total
Six months to 30 September 2008		£m	£m	£m
Revenue		28.1	-	28.1
Operating expenditure		(27.6)	-	(27.6)
Operating profit		0.5	-	0.5
Finance cost		(2.7)	-	(2.7)
Finance income		2.7	-	2.7
Profit before taxation		0.5	-	0.5
Income tax expense		(0.1)	-	(0.1)
Share of post-tax profit from Joint		0.4	-	0.4
Ventures

		Continuing	Discontinued	Total
Six months to 30 September 2007		£m	£m	£m
Revenue		32.0	144.7	176.7
Operating expenditure		(31.8)	(138.7)	(170.5)
Operating profit		0.2	6.0	6.2
Finance cost		(2.1)	(8.3)	(10.4)
Finance income		2.3	0.9	3.2
Profit / (loss) before taxation		0.4	(1.4)	(1.0)
Income tax (expense) / credit		(0.1)	1.4	1.3
Share of post-tax profit from Joint		0.3	-	0.3
Ventures

		Continuing	Discontinued	Total
Year to 31 March 2008		£m	£m	£m
Revenue		85.9	144.7	230.6
Operating expenditure		(85.1)	(138.7)	(223.8)
Operating profit		0.8	6.0	6.8
Finance cost		(4.3)	(8.3)	(12.6)
Finance income		4.8	0.9	5.7
Profit / (loss) before taxation		1.3	(1.4)	(0.1)
Income tax (expense) / credit		(0.4)	1.4	1.0
Share of post-tax profit from Joint		0.9	-	0.9
Ventures

7. Net finance cost/(income)

Six months to 30 September 2008	Continuing	Discontinued	Total
	£m	£m	£m
Interest payable on borrowings	0.2	-	0.2
Hire purchase and finance leases	0.5	-	0.5
Unwinding of discount	0.6	-	0.6
Net finance cost on retirement benefit liabilities	2.9	-	2.9
Other finance costs	0.3	-	0.3
Finance cost	4.5	-	4.5
Interest receivable on short-term deposits	(1.5)	-	(1.5)
Income from held at fair value financial assets	(1.0)	-	(1.0)
Unwinding of discount	(0.2)	-	(0.2)
Other finance income	(0.7)	-	(0.7)
Finance income	(3.4)	-	(3.4)
Net finance cost	1.1	-	1.1

Six months to 30 September 2007	Continuing	Discontinued	Total
	£m	£m	£m
Interest payable on borrowings	1.2	-	1.2
Hire purchase and finance leases	0.3	0.1	0.4
Unwinding of discount	0.3	-	0.3
Net finance cost on retirement benefit liabilities	0.6	-	0.6
Other finance costs	0.3	0.8	1.1
Finance cost	2.7	0.9	3.6
Interest receivable on short-term deposits	(3.5)	(0.3)	(3.8)
Income from held at fair value financial assets	(1.0)	-	(1.0)
Unwinding of discount	(0.1)	-	(0.1)
Other finance income	(0.4)	-	(0.4)
Finance income	(5.0)	(0.3)	(5.3)
Net finance (income)/cost	(2.3)	0.6	(1.7)

Year to 31 March 2008	Continuing	Discontinued	Total
	£m	£m	£m
Interest payable on borrowings	0.8	-	0.8
Hire purchase and finance leases	1.0	0.1	1.1
Unwinding of discount	1.2	-	1.2
Net finance cost on retirement benefit liabilities	1.1	-	1.1
Other finance costs	1.4	0.8	2.2
Finance cost	5.5	0.9	6.4
Interest receivable on short-term deposits	(7.1)	(0.3)	(7.4)
Income from held at fair value financial assets	(1.6)	-	(1.6)
Unwinding of discount	(0.3)	-	(0.3)
Other finance income	(0.8)	-	(0.8)
Finance income	(9.8)	(0.3)	(10.1)
Net finance (income)/cost	(4.3)	0.6	(3.7)

8. Income taxes

The Group's income tax expense from continuing activities (including the Group's share of jointly-controlled entities' income tax) for the six months ended 30 September 2008 is calculated on the estimated average annual normalised effective income tax rate of 23.5% (six months ended 30 September 2007: 25.8% and year ended 31 March 2008: 25.4%). This effective rate differs from the UK standard corporation tax rate of 28% (six months ended 30 September 2007: 30% and year ended 31 March 2008: 30%) due to items such as the effect of tax rates in foreign jurisdictions, R&D tax credits, non-deductible expenses and over/under provisions in previous years. 

9. Discontinued operations (30 September 2007 and 31 March 2008)

Discontinued operations relate to the activities of Lambert Smith Hampton (LSH), which was disposed on 25 June 2007; the Metronet joint venture, which entered into administration on 18 July 2007; theTrans4m joint venture whose contracts were terminated on 30 August 2007; and certain Metronet-related revenue and costs.

Details of consideration received, net assets disposed, income statements and cash flow information for these discontinued operations are as disclosed in the 31 March 2008 Annual Report.

10. Dividends

	Six months	Six months	Year to
	to 30 Sept	to 30 Sept	31 March
	2008	2007	2008
	£m	£m	£m
Final dividend paid for year ended 31 March 2008 (2007)	16.1	14.2	14.2
Interim dividend paid for period ended 30 September 2007	-	-	7.6
Dividends recognised in the period / year	16.1	14.2	21.8
Interim dividend proposed for period ended 30 Sept 2008 (2007)	8.5	7.6	7.6
Final dividend proposed for year ended 31 March 2008	-	-	16.1
Dividends relating to the period / year	8.5	7.6	23.7

	Six months	Six months	Year to
	to 30 Sept	to 30 Sept	31 March
	2008	2007	2008
	pence	pence	pence
Final dividend paid for year ended 31 March 2008 (2007)	16.5p	14.0p	14.0p
Interim dividend paid for period ended 30 September 2007	-	-	7.5p
Dividends recognised in the period / year	16.5p	14.0p	21.5p
Interim dividend proposed for period ended 30 Sept 2008 (2007)	8.75p	7.5p	7.5p
Final dividend proposed for year ended 31 March 2008	-	-	16.5p
Dividends relating to the period /year	8.75p	7.5p	24.0p

11. Earnings per share (EPS)

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

Diluted EPS is the basic EPS after allowing for the dilutive effect of the conversion into ordinary shares of the number of options outstanding during the period. 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:

	Six months to	Six months to	Year to
	30 Sept 2008	30 Sept 2007	31 March 2008
	number ('000)	number ('000)	number ('000)
Number of shares
Weighted average number of shares used in basic and	97,837	101,439	101,105
normalised basic EPS
Effect of dilutive securities - share options	1,753	1,420	1,735
Weighted average number of shares used in diluted and
normalised diluted EPS	99,590	102,859	102,840
	£m	£m	£m
Earnings - continuing and discontinued operations
Profit for the period attributable to equity shareholders	38.8	63.1	100.0
Earnings - continuing operations
Profit for the period attributable to equity shareholders	38.8	31.7	68.6
Profit on disposal of Joint Venture	(2.5)	-	-
Normalised earnings	36.3	31.7	68.6

	Six months to	Six months to	Year to
	30 Sept 2008	30 Sept 2007	31 March 2008
	pence	pence	pence
Continuing and discontinued operations
Basic earnings per share	39.7	62.2	98.9
Diluted earnings per share	39.0	61.3	97.2
Continuing operations
Basic earnings per share	39.7	31.3	67.9
Diluted earnings per share	39.0	30.8	66.7
Normalised basic earnings per share	37.1	31.3	67.9
Normalised diluted earnings per share	36.4	30.8	66.7

Normalised diluted EPS is considered to be a more representative measure of underlying trading.

12. Borrowings

		30 Sept 2008	30 Sept 2007	31 March 2008
		£m	£m	£m
Current
Hire purchase and finance leases		4.3	3.5	3.6
Loan notes		1.2	3.5	4.2
		5.5	7.0	7.8
Non-current
Bank loans		-	16.9	-
Hire purchase and finance leases		9.5	9.5	10.4
Loan notes		2.9	3.8	3.2
		12.4	30.2	13.6
Movements in borrowings are analysed as follows:
		Six months to	Six months to	Year to
		30 Sept 2008	30 Sept 2007	31 March 2008
		£m	£m	£m
At beginning of period		21.4	38.2	38.2
Acquisition of subsidiaries		-	1.5	1.6
Unwind of discount		0.2	-	0.4
Additions to finance leases		1.8	3.8	6.3
Repayment of borrowings		(3.5)	-	(17.8)
Repayment of finance leases		(2.0)	(1.9)	(3.6)
Difference on exchange		-	(0.4)	0.3
Borrowings of discontinued operations		-	(4.0)	(4.0)
At end of period		17.9	37.2	21.4

The Group has the following undrawn committed borrowing facilities available expiring as follows:

		30 Sept 2008	30 Sept 2007	31 March 2008
		£m	£m	£m
Between two and five years		74.2	43.2	58.8

13. 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.

At 30 September 2007 the defined benefit section of the Atkins Pension Plan was closed to future accrual of benefit for members that do not enjoy a statutory or contractual right to a final salary pension. These members transferred to a defined contribution section of the plan with effect from 1 October 2007.

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.

	30 Sept	30 Sept	31 March
	2008	2007	2008
Price inflation	3.60%	3.30%	3.60%
Rate of increase of pensions in payment
Limited Price Indexation	3.60%	3.30%	3.60%
Limited Price Indexation to 2.5%	2.50%	2.50%	2.50%
Fixed	5.00%	5.00%	5.00%
Rate of increase in salaries	5.10%	4.80%	5.10%
Rate of increase for deferred pensioners	3.60%	3.30%	3.60%
Discount rate	6.90%	5.90%	6.50%
Expected rate of return on plan assets	7.30%	6.70%	7.30%
Expected rate of social security increases	3.60%	3.30%	3.60%
Longevity at age 65 for current pensioners
Men	22.2 years	18.8 years	22.2 years
Women	24.6 years	21.8 years	24.6 years
Longevity at age 65 for future pensioners (current age 45)
Men	24.1 years	21.0 years	24.1 years
Women	26.5 years	24.0 years	26.5 years

The components of the defined benefit pension cost are as follows:

	Six months	Six months	Year to
	to 30 Sept	to 30 Sept	31 March
	2008	2007	2008
	£m	£m	£m
Cost of sales
Current service cost	4.8	11.1	16.7
Finance cost / (income)
Finance cost	32.7	28.1	56.5
Expected return on plan assets	(29.8)	(27.5)	(55.4)
Net finance cost	2.9	0.6	1.1
Total charge to income statement for defined benefit schemes	7.7	11.7	17.8
Statement of recognised income and expense
Loss on pension scheme assets	(103.2)	(7.0)	(88.1)
Changes in assumptions	82.5	79.0	94.5
Actuarial (loss) / gain	(20.7)	72.0	6.4
Deferred tax credited / (charged) to equity	5.8	(24.2)	(7.4)
Actuarial (loss) / gain net of deferred tax	(14.9)	47.8	(1.0)

Retirement benefit liabilities comprise the following:

	30 Sept	30 Sept	31 March
	2008	2007	2008
	£m	£m	£m
Defined benefit obligation	(967.7)	(1,013.0)	(1,021.9)
Fair value of plan assets	759.1	855.0	808.8
Retirement benefit liabilities	(208.6)	(158.0)	(213.1)
Deferred tax on retirement benefit liabilities	57.8	44.6	59.0
Post-tax retirement benefit liabilities	(150.8)	(113.4)	(154.1)

Under the Atkins Pension Plan there are retirement benefit liabilities of £171.4m (30 September 2007: £155.5m; 31 March 2008: £181.6m) representing £123.4m after deferred tax (30 September 2007: £111.5m; 31 March 2008: £130.8m).

Under the Railways Pension Scheme there are retirement benefit liabilities of £34.7m (30 September 2007: £2.0m; 31 March 2008: £29.0m) representing £25.0m after deferred tax (30 September 2007: £1.4m; 31 March 2008: £20.9m).

Under other defined benefit schemes there are retirement benefit liabilities of £2.5m (30 September 2007: £0.5m; 31 March 2008: £2.5m). 

Movements in the retirement benefit liabilities are as follows:

	Six months	Six months	Year to
	to 30 Sept	to 30 Sept	31 March
	2008	2007	2008
	£m	£m	£m
At beginning of period	(213.1)	(250.1)	(250.1)
Service cost	(4.8)	(11.1)	(16.7)
Net finance cost	(2.9)	(0.6)	(1.1)
Contributions	32.9	31.8	48.5
Actuarial (loss) / gain	(20.7)	72.0	6.4
Difference on exchange	-	-	(0.1)
At end of period	(208.6)	(158.0)	(213.1)

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

		Effect on plan liabilities
	Change in	Atkins Pension	Railways Pension
	assumption	Plan	Scheme
Discount rate	increase/decrease 0.5%	decrease/increase 10.0%	decrease/increase 9.0%
Inflation	increase/decrease 0.5%	increase/decrease 6.5%	increase/decrease 9.0%
Real rate of increase in salaries	increase/decrease 0.5%	increase/decrease 2.0%	increase/decrease 3.0%
Longevity	increase 1 year	increase 4.0%	increase 3.0%

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

14. Ordinary shares

	30 Sept 2008 £m	30 Sept 2007  £m	31 March 2008  £m
Authorised
At beginning and end of period, ordinary shares of 0.5p each	0.8	0.8	0.8
Issued and fully paid ordinary shares of 0.5p each
At beginning of period	0.5	0.5	0.5
At end of period	0.5	0.5	0.5

The numbers of authorised shares (150,000,000) and issued, allotted and fully paid up shares (104,451,799) at 30 September 2008 are unchanged from 30 September 2007 and 31 March 2008.

At the Annual General Meeting held on Wednesday 3 September 2008, shareholder authority for the Company to purchase up to a maximum of 10,051,000 of its own ordinary shares (representing 10% of the issued share capital of the Company, excluding treasury shares, on 25 June 2008) was renewed. During the period to 30 September 2008, 1,123,000 shares were purchased (2007: nil) at a cost of £11.4m (2007: nil) including fees and stamp duty. 

At 30 September 2008 a total of 4,341,000 ordinary shares of 0.5p each were held as treasury shares (30 September 2007: nil; 31 March 2008: 3,218,000 ordinary shares). These shares, which represent approximately 4.2% (30 September 2007: nil; 31 March 2008: 3.1%) of called up share capital, have not been cancelled and represent a deduction from shareholders' equity.

No further shares have been purchased between 30 September 2008 and the date of this condensed consolidated half year financial information.

15. Statement of changes in equity

		Share		Retained	Equity
	Share	premium	Merger	(loss) /	shareholders'
	capital	account	reserve	earnings	(deficit)/funds
	£m	£m	£m	£m	£m
Balance at 1 April 2008	0.5	62.4	8.9	(95.2)	(23.4)
Profit for the period	-	-	-	38.8	38.8
Dividends	-	-	-	(16.1)	(16.1)
Actuarial loss on retirement benefit liabilities	-	-	-	(14.9)	(14.9)
Share-based movements	-	-	-	4.8	4.8
Share buyback	-	-	-	(11.4)	(11.4)
Net differences on exchange	-	-	-	1.8	1.8
Balance at 30 September 2008	0.5	62.4	8.9	(92.2)	(20.4)

		Share		Retained	Equity
	Share	premium	Merger	(loss) /	shareholders'
	capital	account	reserve	earnings	(deficit)/funds
	£m	£m	£m	£m	£m
Balance at 1 April 2007	0.5	62.4	8.9	(147.9)	(76.1)
Profit for the period	-	-	-	63.1	63.1
Dividends	-	-	-	(14.2)	(14.2)
Actuarial gain on retirement benefit liabilities	-	-	-	47.8	47.8
Share-based movements	-	-	-	2.7	2.7
Share of Joint Venture equity items	-	-	-	(0.2)	(0.2)
Net differences on exchange	-	-	-	(0.6)	(0.6)
Balance at 30 September 2007	0.5	62.4	8.9	(49.3)	22.5

		Share		Retained	Equity
	Share	premium	Merger	(loss) /	shareholders'
	capital	account	reserve	earnings	(deficit)/funds
	£m	£m	£m	£m	£m
Balance at 1 April 2007	0.5	62.4	8.9	(147.9)	(76.1)
Profit for the period	-	-	-	100.0	100.0
Dividends	-	-	-	(21.8)	(21.8)
Actuarial loss on retirement benefit liabilities	-	-	-	(1.0)	(1.0)
Share-based movements	-	-	-	7.7	7.7
Share buyback	-	-	-	(34.9)	(34.9)
Share of Joint Venture equity items	-	-	-	0.2	0.2
Cash flow hedges	-	-	-	(0.8)	(0.8)
Net differences on exchange	-	-	-	3.3	3.3
Balance at 31 March 2008	0.5	62.4	8.9	(95.2)	(23.4)

The amounts above are shown net of taxation.

16. Cash generated from / (used in) continuing operations

	Six months	Six months	Year to
	to 30 Sept	to 30 Sept	31 March
	2008	2007	2008
	£m	£m	£m
Profit for the period from continuing operations	38.8	31.7	68.6
Adjustments for:
Income tax	11.2	11.0	23.3
Finance income (note 7)	(3.4)	(5.0)	(9.8)
Finance cost (note 7)	4.5	2.7	5.5
Share of post-tax profit from Joint Ventures (note 6)	(0.4)	(0.3)	(0.9)
Profit on disposal of Joint Venture (note 5)	(2.5)	-	-
Depreciation charges	11.6	9.8	19.3
Amortisation of intangible assets	4.4	4.7	11.1
Release of deferred income	(0.1)	(2.0)	(3.0)
Share based payment charge	4.8	2.7	8.6
Result on disposal of property, plant and equipment	(0.1)	(0.2)	0.1
Movement in provisions	0.8	(2.7)	(5.5)
Movement in pensions	(28.1)	(20.7)	(31.8)
Movement in working capital	(3.3)	(48.5)	(4.6)
Cash generated from/(used in) continuing operations	38.2	(16.8)	80.9

17. Events after balance sheet date

MG Bennett and Associates Ltd was acquired on 3 October 2008 for a consideration of £3.2m

It is not practicable to disclose provisional fair values of the net assets acquired within this condensed consolidated half year financial information due to its proximity to the announcement date. Full disclosures in respect of this and any other business combinations will be provided in the Group's financial statements for the year ending 31 March 2009.

18. Related party transactions

Details of the directors' shareholdings, share options and remuneration are disclosed in the 31 March 2008 Annual Report. It is not considered meaningful to disclose this information at the half year.

Transactions with the retirement benefit schemes are disclosed in note 13.

The Group entered into a number of transactions in the normal course of business with its Joint Ventures during the period.

19. Seasonality

The Group's activities are not subject to significant seasonal variation.

END

ENDIR PUGAWGUPRGRA

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