Half Yearly Report

25th Nov 2009 07:00



Half year financial report for the six months ended 30 September 2009

Atkins reports good results and is confident about the second half of the year

Design and engineering consultancy group WS Atkins plc (Atkins) today announces unaudited results for the six months ended 30 September 2009.

FINANCIAL SUMMARY

		Six months to	Six months to	Increase /
		30 Sept 2009	30 Sept 2008	(Decrease)
Income statement - as reported
Revenue		£701.2m	£710.8m	(1)%
Operating profit		£51.1m	£48.2m	6%
Operating margin		7.3%	6.8%	0.5pp
Profit before taxation		£43.5m	£50.0m	(13)%
Profit after taxation		£33.9m	£38.8m	(13)%
Diluted earnings per share		34.3p	39.0p	(12)%
Dividend	a	9.25p	8.75p	6%
People
Staff numbers at 30 September	b	16,235	18,322	(11)%
Average staff numbers	b	16,923	17,713	(4)%
Cash
Net funds	c	£230.6m	£164.5m	40%

Notes:

a. Interim dividend declared for the six months to 30 September.

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

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

Highlights

* Revenue down by 1% to £701.2m, with average staff numbers down 4%

* On a comparable basis operating margins were up slightly at 6.9% (2008: 6.8%)

* Diluted earnings per share down 12% to 34.3p (2008: 39.0p), and on a comparable basis down 13% to 31.6p (2008: 36.4p)

* Strong cash generation in the period, with operating cash inflow of £38.2m (2008: £38.2m) and net funds as at 30 September 2009 of £230.6m (2008: £164.5m)

* Interim dividend of 9.25p per share

* Good work in hand with 90% of full year forecast revenue secured (2008: 87%)

* In continuing challenging market conditions we are confident that the Group is well placed to make good progress in the second half of the year

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

"Our performance over the six months demonstrates our ability to respond quickly to changes in the marketplace and to flex our resources to meet expected demand. The quality of our engineering capability and our strong client relationships position us well for the opportunities and challenges ahead."

Enquiries

Atkins
Keith Clarke, Chief Executive	+ 44 (0) 1372 726140
Heath Drewett, Group Finance Director	+ 44 (0) 1372 726140
Sara Lipscombe, Group Communications Director	+ 44 (0) 1372 726140
Smithfield
Alex Simmons	+44 (0) 20 73604900

Notes to editors

1. Atkins

Atkins (www.atkinsglobal.com) is one of the world's leading engineering and design consultancies. We have the depth and breadth of technical expertise to respond both to the complex challenges of major infrastructure projects, and the urgent transition to a low-carbon economy. Whether it's the concept for a new skyscraper, the upgrade of a rail network, the modelling of a flood defence system or the improvement of a management process, we plan, design and enable solutions.

Atkins was named among the 20 Best Big Companies to Work For 2009 by The Sunday Times; The Times Top 100 Graduate Employers 2009; and The Times Top 50 Companies Where Women Want to Work 2008. The company was construction and civil engineering sector winner for the fourth consecutive year in the Target National Graduate Recruitment Awards 2009.

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

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 statement of comprehensive income, consolidated balance sheet, consolidated statement of cash flows, consolidated statement of changes in equity, notes to the condensed consolidated interim financial information and the independent auditor's review report.

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 interim 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. 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 delivered good results in the first six months.  As anticipated, we have adjusted our resources to meet expected market demand and, despite a 4% reduction in average staff numbers, our revenue is down only 1% on the same period last year.

Group operating profit increased to £51.1m, with operating margin up 0.5 points to 7.3%.  The Group's operating profit benefited from a one-off pension curtailment gain of £2.6m, following changes to future benefits made during the year.  Excluding this one-off gain, operating profit margins were up slightly at 6.9%.

Profit before tax was £43.5m (2008: £50.0m) and diluted earnings per share were 34.3p (2008: 39.0p).  Excluding the pension curtailment gain in 2009 and the profit on sale of Joint Venture in 2008, the profit before tax and diluted earnings per share would have been £40.9m (2008: £47.5m) and 31.6p (2008: 36.4p) respectively.  The difference is primarily due to higher pension finance costs together with reduced interest income on our cash balances.

The Group's balance sheet remains strong with net funds at 30 September 2009 of £230.6m (2008: £164.5m).  The cash inflow from operations was £38.2m (2008: £38.2m) despite significant prior year restructuring costs being paid out during the period.

In managing our overall staff numbers, we have reduced our headcount from 18,017 at 31 March 2009 to 16,235 at 30 September 2009.  Furthermore, we have successfully redeployed more than 400 people into different roles across the Group.  In addition, 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 projects.

Outlook

We remain confident that our good performance to date can be maintained through the rest of the year.  Despite the uncertainty that still exists surrounding the timing of when contracted work will actually start, we have strong work in hand, with 90% of full year forecast revenue secured (2008: 87%).

We will continue to flex our resources to meet market demand and are confident that the breadth of our business will provide a good level of resilience in the event of a continued slowdown in the UK economy.

We are confident that the Middle East market will recover and plan to maintain our long established presence in the region.  We remain committed to working with our clients as the market liquidity issues are resolved.

We have responded early to the recessionary challenges and opportunities in a number of our markets and will continue to take pre-emptive action to position ourselves well for the future.

Dividend

The Board has declared an interim dividend of 9.25p per share. This represents an increase of 6% compared with the same period last year and demonstrates the Board's confidence in the Group's prospects.  The interim dividend will be paid on 29 January 2010 to all shareholders on the register on 18 December 2009.

BUSINESS REVIEW

Design and Engineering Solutions

	Six months to	Six months to	Increase /
	30 Sept 2009	30 Sept 2008	(Decrease)
Revenue	£197.1m	£202.6m	(3)%
Operating profit	£13.0m	£16.9m	(23)%
Operating margin	6.6%	8.3%	(1.7)pp
Work in hand	88%	87%	1pp
Staff numbers at 30 September	4,616	5,176	(11)%
Average staff numbers	4,820	5,057	(5)%

The Design and Engineering segment contains a broad range of complementary disciplines and has seen mixed performance in the first half of the year.  Revenue and operating profit fell by 3% and 23% respectively, after including the impact of restructuring costs in both our water and UK building design businesses of circa £3m.

Many of the businesses in Design and Engineering Solutions are, however, performing well in niche markets where our technical skills remain in demand.

* We have continued our successful relationship with the Olympic Delivery Authority and The London Organising Committee of the Olympic Games as official engineering design services provider for the Games.  We have also secured design projects in recent months in the Public Education and Healthcare sectors, most notably the New Glasgow Campus and NHS Tayside Murray Royal Hospital.  However, the private developer market, where we have only limited exposure, remains slow.

* Our water operations business is in the midst of the procurement process for the appointment of consultants for the AMP5 capital programme.  As a result we have seen a reduction in the volume of work from the UK water companies, which account for approximately 13% of the revenue in this segment.

* Demand for our broad range of environmental, land remediation and planning services remains good.  We have been working for the Environment Agency on flood mitigation and secured the South West Coastal Strategy Packages delivering three large flood risk management and habitat creation strategies covering Poole Harbour, the Exe Estuary and the Taw & Torridge Estuaries.  

* The nuclear market remains strong and we continue to assist the UK Department for Energy and Climate Change with nuclear studies.  The nuclear new build programme presents further opportunities in this sector.

* Although we have seen some deferral of clients' capital spend, our Oil and Gas business has performed in line with expectations and is seeing increasing demand underpinned by a rise in the oil price.

* Our 400 person defence business continues to support the drive for efficiency from clients, assisting them in maximising value from their capital programmes.

* Aerospace has a healthy secured workload, despite experiencing some deferrals in client programmes.  We continue to believe there is a strong medium and long-term market for our services in this sector.

Outlook

The outlook for Design and Engineering Solutions is good, following the restructuring that we have carried out in the first six months of the year.  Secured work in hand represents 88% of the full year forecast revenue, an increase of 1% on the same time last year.

Highways and Transportation

	Six months to	Six months to	Increase /
	30 Sept 2009	30 Sept 2008	(Decrease)
Revenue	£143.4m	£138.0m	4%
Operating profit	£12.0m	£8.4m	43%
Operating margin	8.4%	6.1%	2.3pp
Work in hand	93%	86%	7pp
Staff numbers at 30 September	2,935	3,077	(5)%
Average staff numbers	2,967	2,937	1%

Highways and Transportation has continued to perform well.  Revenue increased by 4% and margins were buoyed in the first six months due to a high level of design activity on a number of  major commissions, notably the M25 widening DBFO contract, which reached financial close in May 2009.  The related 30-year operation and maintenance joint venture contract commenced successfully on 13 September 2009.

We have significantly extended our order book in the highway services market, which represents 56% of the segment, where we have been appointed preferred bidder for the five-year Network Management contract in Somerset which runs to 2015.  This new contract builds on 13 years of continuous service to the County.  Our contract with Gloucestershire County Council has also been extended by three years to 2014. We continue our Cambridgeshire County Council and Highways Agency Area 6 MAC contracts for highway maintenance in East Anglia and have successfully demobilised the Area 11 contract.

Demand for services from our intelligent transport systems business, which specialises in cost-effective technology-based solutions to relieve traffic problems and maximise the performance of existing infrastructure, remains high.  In particular, we are supporting the Highways Agency with a broad spectrum of expertise and services in connection with their Managed Motorways programme.

Finally, our transport planning business has performed well in the first half of the year with continued strong demand from central government and regional transport bodies for our advisory services on policy, plans, governance and funding. The recent opening of the Atkins designed Oxford Circus pedestrian crossing in the centre of London is a good example of our multidisciplinary expertise overcoming complex planning issues. We have been successful on all nine of the contracts that we bid on Transport for London's Engineering and Project Management Framework, which positions this part of the business well for the future.

Outlook

The full year outlook for this segment remains good, with 93% of this year's forecast revenue secured, reflecting the high proportion of long-term contracts in this segment.

Rail

	Six months to	Six months to	Increase /
	30 Sept 2009	30 Sept 2008	(Decrease)
Revenue	£93.9m	£99.6m	(6)%
Operating profit	£6.4m	£7.1m	(10)%
Operating margin	6.8%	7.1%	(0.3)pp
Work in hand	89%	90%	(1)pp
Staff numbers at 30 September	1,481	1,627	(9)%
Average staff numbers	1,524	1,643	(7)%

Rail revenue was down 6% on last year, reflecting delays in projects coming to market and the demobilisation of our SEC bridge inspection contract, which accounts for the majority of the reduction in headcount.  Our operating margin was also slightly lower at 6.8% (2008: 7.1%).

Our signalling business remains busy with ongoing work for Network Rail on two major resignalling projects for Newport, Gwent and the North London Line, while our successful involvement in the West Coast Main Line resignalling at Rugby and Nuneaton comes to an end.

Our rail design business faces a more competitive market given its lower barriers to entry.  However, the first half of the year has seen solid performance on design projects for Network Rail on the Thameslink Programme, especially the design of Farringdon Station, multidisciplinary design for Chiltern Railways, plus ongoing work for Transport for London and London Underground.

Work is progressing well with our partner Arup on the design for 22km of twin bored tunnel for Crossrail, one of the largest and most important elements of the Crossrail project.

Outlook

The investment outlook for our rail business remains positive, with high technical barriers to entry for our signalling business and our proven track record in this market.

We have secured 89% of our full year forecast revenue and with the market underpinned by Control Period 4 spend, we remain well placed to support clients with our depth and breadth of multidisciplinary expertise.

Middle East

	Six months to	Six months to	Increase /
	30 Sept 2009	30 Sept 2008	(Decrease)
Revenue	£78.6m	£82.0m	(4)%
Operating profit	£6.5m	£8.7m	(25)%
Operating margin	8.3%	10.6%	(2.3)pp
Work in hand	96%	85%	11pp
Staff numbers at 30 September	2,051	2,948	(30)%
Average staff numbers	2,355	2,696	(13)%

Middle East

The Middle East business continues to trade successfully in a turbulent market. Revenue is down just 4% on the previous year, with an operating margin of 8.3% for the period, after restructuring costs of around £2m.  We have continued to reduce headcount in line with prospective workload, resulting in a 30% fall in staff numbers year on year. 

Our Middle East business has a well established local presence in six primary locations in the region, centred on Dubai and Abu Dhabi. We have continued to work on projects such as the Dubai Metro and Durrat al Bahrain, for which we have recently been awarded the architectural and infrastructure design of the third and final stage.

We continue to expand our multidisciplinary expertise in the region, investing in and securing work in defence, energy and water operations.  In our planning and consultancy business we are seeing increasing opportunities where clients seek greater clarity and certainty of their business cases before investment.

The Red line of the Dubai Metro opened successfully on 09/09/09.  The Dubai Metro is the world's longest, automated driverless metro system, with more than 25 over-ground stations, four underground stations and more than 47km of viaducts.  Work on the Green line continues, along with other rail related work such as the recently awarded Makkah Metro project in Saudi Arabia.

Liquidity is slowly starting to return to the region.  Despite an increase in the ageing of our receivables, for which we have maintained our policy of providing as they fall more than 180 days overdue, we continue to receive payments from key clients and are confident of ultimate recovery.

Outlook

Confidence in the region is returning and both contract opportunities and forward workload are increasing, although we continue to experience some uncertainty over the timing of work starting on contracts that have been won.  We have work in hand representing 96% of this year's forecast revenue.

China and Europe

	Six months to	Six months to	Increase /
	30 Sept 2009	30 Sept 2008	(Decrease)
Revenue	£65.4m	£53.0m	23%
Operating profit	£2.7m	£1.3m	108%
Operating margin	4.1%	2.5%	1.6pp
Work in hand	88%	87%	1pp
Staff numbers at 30 September	1,783	1,716	4%
Average staff numbers	1,772	1,633	9%

This segment consists of our design and engineering consultancy businesses in Hong Kong, Mainland China and five countries across Europe in Denmark, Ireland, Poland, Portugal and Sweden.

The portfolio of businesses in China and Europe have increased revenue by 23% and improved margins year on year, with average staff numbers up some 9%. 

China

	Six months to	Six months to	Increase /
	30 Sept 2009	30 Sept 2008	(Decrease)
Revenue	£32.3m	£19.6m	65%
Operating profit	£1.8m	£0.9m	100%
Operating margin	5.6%	4.6%	1.0pp
Staff numbers at 30 September	1,007	911	11%
Average staff numbers	981	869	13%

Our Chinese business continues to expand as a consequence of success in the buoyant Hong Kong rail infrastructure market, most notably with design work for MTRC on the West Island Line, Express Link, Shatin to Central link and the South Island Line.

The urban planning and architectural businesses in Mainland China are performing in line with our expectations in a very competitive market.

Europe

	Six months to	Six months to	Increase /
	30 Sept 2009	30 Sept 2008	(Decrease)
Revenue	£33.1m	£33.4m	(1)%
Operating profit	£0.9m	£0.4m	125%
Operating margin	2.7%	1.2%	1.5pp
Staff numbers at 30 September	776	805	(4)%
Average staff numbers	791	764	4%

Our European portfolio of businesses has maintained revenue and improved margins in difficult economic conditions.

Performance has been mixed, with our Danish business continuing to expand, securing a significant resignalling design contract extending over 15 years for the Danish European Rail Traffic Management System (ERTMS).  This 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.  The new system promises an improvement in safety, performance and capacity, opening up the possibility of running non-stop trains across all European borders.  This positions us well for further ERTMS work in the UK and across Europe over the coming years.  We also continue to work on the Copenhagen Metro.

Our Polish business has extended its workload in the roads sector with its appointment as independent checking engineer and site supervisor for the A2 toll motorway, which extends over 100km with some 80 bridges.

Difficult economic conditions in Ireland, which represents 15% of Europe's revenue, have resulted in projects delayed, increasingly competitive pricing and tight liquidity amongst clients.  We have continued to reduce the size of our business in Ireland to match anticipated demand.

Outlook

The outlook for this sector is mixed with very good prospects for our rail design and infrastructure businesses in Hong Kong and strong demand for urban planning in Mainland China.  Our Scandinavian businesses, most notably Denmark, have promising growth potential, while our other European businesses continue to face challenging market conditions.

Management and Project Services

	Six months to	Six months to	Increase /
	30 Sept 2009	30 Sept 2008	(Decrease)
Revenue	£103.3m	£113.3m	(9)%
Operating profit	£7.0m	£7.5m	(7)%
Operating margin	6.8%	6.6%	0.2pp
Work in hand	86%	84%	2pp
Staff numbers at 30 September	2,071	2,433	(15)%
Average staff numbers	2,165	2,449	(12)%

We have improved the operating margin in this segment, which includes our Faithful+Gould business, to 6.8% (2008: 6.6%), despite a revenue reduction of 9%.

In the UK, workload in the public sector has continued, whilst reduced activity in the commercial property sector, which represents less than 10% of the business, has resulted in some further right-sizing.  The business remains particularly strong in the finance, education and utilities sectors.  Our other public sector workload is being augmented by our recent appointment to the Government's Buying Solutions Project Management and Design Services Framework.

Our US business, of some 550 staff, has experienced a slight contraction, as the construction sector remains depressed.  However, our core workload is in the energy sector, which has remained strong, and we continue to work with the US Government having secured a position on a five-year General Services Administration (GSA) national project management framework.

Elsewhere, our Asia Pacific business continues to develop, underpinned by work for global pharmaceutical companies and US and European inward investors.

Our management consultancy business has continued to show significant improvement, supported by several long-term UK Government framework contracts, predominantly in security and education.

Outlook

We have extended our work in hand to 86% of this year's forecast revenue.  The business has a diverse portfolio and we remain well placed to assist clients with their own efficiency and cost cutting initiatives.

Our management consultancy business has good work in hand and excellent prospects.

Asset Management

	Six months to	Six months to	Increase /
	30 Sept 2009	30 Sept 2008	(Decrease)
Revenue	£25.8m	£26.6m	(3)%
Operating (loss) / profit	£0.7m	£(1.2)m	-
Operating margin	2.7%	(4.5)%	7.2pp
Profit on disposal of JV	-	£2.5m	-
Work in hand	82%	90%	(8)pp
Staff numbers at 30 September	632	708	(11)%
Average staff numbers	655	687	(5)%

Results for this sector have improved and since the half year we have exited the previously reported poor performing PFI maintenance contract that impacted margins last year.  The contract has now been transferred to the county council concerned and we are confident that the provision made at the year end in respect of this contract will be sufficient to complete a full exit from our obligations.

Our managing agent business continues to win work in the financial services sector, and during the first six months of the year has secured a five-year contract to deliver helpdesk and managing agent services to Lloyds Banking Group UK. 

Outlook

This segment has work in hand of 82% of forecast revenue.

FINANCE REVIEW

The revenue and operating profit for the six months to 30 September 2009 are discussed in the preceding Business Review.

Taxation

The Group's effective normalised tax rate on continuing operations was 22.0% (2008: 23.5%) reflecting the increasing proportion of the Group's profits earned in lower tax rate jurisdictions, over provision in prior years and the impact of R&D tax credits.

Pensions

Pension Costs

The cost of the Group's defined benefit pension schemes for the six months to 30 September 2009 amounted to £7.9m (2008: £7.7m). The charge for the six months to 30 September 2009 includes the benefit of a one-off curtailment gain of £2.6m in respect of the Railways Pension Scheme.

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. This valuation indicated that the Plan had an actuarial deficit of approximately £215m. Cash contributions of £40m were made during the year ended 31 March 2009 to fund the deficit, with the Group committed to contributing £32m per year thereafter until 2014. As a consequence, total deficit funding contributions paid in the six-month period to 30 September 2009 amounted to £16m. 

The defined benefit section of the Plan is closed to future accrual of benefit for members who do not enjoy a statutory or contractual right to a final-salary pension. Whilst closed to future accrual, the link to final salary has been retained.

On 1 September 2009 the terms of the Atkins section of the Railways Pension Scheme were amended in respect of the future benefits offered by the scheme. Under the amended terms members were offered the choice of retaining their current benefits in return for higher contributions or receiving future benefits linked to their salary at 1 September 2009 with future increases capped at inflation. A curtailment gain of £2.6m has been recognised in the period as a result of some members electing to cap their future pensionable salary increases.

IAS 19

The IAS 19 post-tax retirement liability of the Group's pension schemes is estimated at £301.6m (30 September 2008: £150.8m; 31 March 2009: £215.4m). Although the value of the schemes' assets increased substantially in the six-month period to 30 September 2009, the IAS 19 deficit increased by £86.2m principally due to the decrease in the discount rate used from 6.3% to 5.3%.

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 increased significantly over the eighteen months to 30 September 2008 with a corresponding increase in the discount rate.  During the last year this increase has all but reversed, returning rates to their April 2007 levels, with the most significant reduction during the six-month period to 30 September 2009.

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

Earnings per share (EPS)

Diluted EPS reduced by 12% to 34.3p (2008: 39.0p) as a result of the reduction in the Group's profit before tax of 13%, partially offset by a lower effective tax rate.

Basic EPS for the period was 34.8p (2008: 39.7p).

Net funds

Net funds are analysed as follows:

£m	30 Sept 2009	30 Sept 2008	31 March 2009
Cash and cash equivalents	189.8	136.5	209.7
Loan notes receivable	17.7	12.7	12.9
Financial assets at fair value through profit & loss	37.1	33.2	28.7
Borrowings due within one year	(3.1)	(1.2)	(2.8)
Borrowings due after one year	-	(2.9)	(0.6)
Finance leases	(10.9)	(13.8)	(13.7)
Net funds	230.6	164.5	234.2

The Group's treasury policies and financial risk management remain as described in the annual financial statements for the year ended 31 March 2009. In addition to the net funds above, the Group has £58.8m (2008: £74.2m) of undrawn committed borrowing facilities available to fund its operations as disclosed in note 12 to this condensed consolidated interim financial information. This reduction is due to the issue of letters of credit relating to the M25 widening DBFO contract of circa £16m.

Cash flow

The Group's cash flow in the period was strong with cash generated from operations of £38.2m (2008: £38.2m). Whilst the six month period saw a larger increase in working capital than the same period last year this was offset by the timing impact of cash payments made in respect of the pension deficit funding. Further analysis is disclosed within note 15 of this condensed consolidated interim 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 on page 37 of the annual financial statements for the year ended 31 March 2009, namely:

* A change in the economic environment

* Competition from others in our markets

* Matching staff levels to workload

* Project management of our own and clients' projects

* Changes to the contracting environment resulting from market developments

* Pandemic influenza affecting a significant number of staff

* Recruiting and retaining high-calibre staff

* The health and safety environment

* Reputational risk.

We remain vigilant to these potential risks, in particular the impact of the continuing recessionary and liquidity issues in our major markets.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

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

The directors of WS Atkins plc are disclosed in the Annual Report for the year ended 31 March 2009, where we reported that Heath Drewett was appointed as an executive director on 15 June 2009 and succeeded Robert MacLeod as finance director when he left the Company on 19 June 2009. James Morley retired as a non-executive director on 30 June 2009. In addition, Allan Cook CBE was appointed as a non-executive director on 10 September 2009. Allan Cook will succeed Ed Wallis as Chairman on 1 February 2010.

By order of the Board

Richard Webster

Company Secretary

25 November 2009

Consolidated income statement for the six months ended 30 September 2009 (unaudited)

		Six months to	Six months to	Year to
		30 Sept 2009	30 Sept 2008	31 March 2009
Notes		£m	£m	£m
Revenue (Group and share of Joint Ventures)		713.7	738.9	1,532.4
Revenue	4	701.2	710.8	1,487.2
Cost of sales		(439.0)	(443.6)	(941.9)
Gross profit		262.2	267.2	545.3
Administrative expenses		(211.1)	(219.0)	(442.2)
Operating profit	4	51.1	48.2	103.1
Profit on disposal of Joint Venture	5	-	2.5	2.5
Share of post-tax profit from Joint Ventures	6	-	0.4	0.2
Profit from operations		51.1	51.1	105.8
Finance income	7	1.7	3.4	6.7
Finance cost	7	(9.3)	(4.5)	(9.8)
Net finance cost	7	(7.6)	(1.1)	(3.1)
Profit before taxation		43.5	50.0	102.7
Income tax expense	8	(9.6)	(11.2)	(18.5)
Profit for the period attributable to
equity shareholders		33.9	38.8	84.2
Earnings per share
Basic earnings per share	10	34.8p	39.7p	86.1p
Diluted earnings per share	10	34.3p	39.0p	84.8p
Dividends
Dividends recognised in the period - paid	9	17.25p	16.50p	25.25p
Dividends relating to the period - declared	9	9.25p	8.75p	26.00p

The accompanying notes form an integral part of this condensed consolidated interim financial information.

Consolidated statement of comprehensive income for the six months ended 30 September 2009 (unaudited)

		Six months to	Six months to	Year to
		30 Sept 2009	30 Sept 2008	31 March 2009
Notes		£m	£m	£m
Profit for the period		33.9	38.8	84.2
Other comprehensive income
Actuarial loss on post-employment benefit  liabilities	13	(131.2)	(20.7)	(122.8)
Tax on items charged to equity	13	36.7	5.8	34.3
Net differences on exchange		(5.5)	1.8	12.4
Other comprehensive income for the period   net of tax		(100.0)	(13.1)	(76.1)
Total comprehensive income   attributable to equity shareholders		(66.1)	25.7	8.1

The accompanying notes form an integral part of this condensed consolidated interim financial information.

Consolidated balance sheet as at 30 September 2009 (unaudited)

		30 Sept 2009	30 Sept 2008	31 March 2009
	Notes	£m	£m	£m
Assets
Non-current assets
Goodwill		61.5	57.3	62.3
Other intangible assets		6.1	13.5	9.0
Property, plant and equipment	11	39.8	43.6	46.6
Investments in Joint Ventures		3.7	3.5	3.9
Deferred income tax assets		136.1	68.6	101.6
Other receivables		11.5	12.7	12.9
		258.7	199.2	236.3
Current assets
Inventories		0.3	0.3	0.3
Trade and other receivables		350.2	337.5	353.7
Financial assets at fair value through   profit or loss		37.1	33.2	28.7
Cash and cash equivalents		189.8	136.5	209.7
		577.4	507.5	592.4
Liabilities
Current liabilities
Borrowings	12	(7.2)	(5.5)	(7.6)
Trade and other payables		(458.2)	(441.1)	(478.7)
Derivative financial instruments		(0.8)	(0.4)	(1.2)
Current income tax liabilities		(29.2)	(25.6)	(31.2)
Provisions for other liabilities and charges		(8.3)	(5.4)	(9.9)
		(503.7)	(478.0)	(528.6)
Net current assets		73.7	29.5	63.8
Non-current liabilities
Borrowings	12	(6.8)	(12.4)	(9.5)
Provisions for other liabilities and charges		(18.7)	(13.5)	(17.8)
Post-employment benefit liabilities	13	(429.6)	(218.3)	(311.5)
Other non-current liabilities		(6.6)	(4.9)	(4.8)
		(461.7)	(249.1)	(343.6)
Net liabilities		(129.3)	(20.4)	(43.5)
Equity
Called-up share capital	14	0.5	0.5	0.5
Share premium account		62.4	62.4	62.4
Merger reserve		8.9	8.9	8.9
Retained loss		(201.1)	(92.2)	(115.3)
Equity shareholders' deficit		(129.3)	(20.4)	(43.5)

The accompanying notes form an integral part of this condensed consolidated interim financial information.

Consolidated statement of cash flows for the six months ended 30 September 2009 (unaudited)

		Six months to	Six months to	Year to
		30 Sept 2009	30 Sept 2008	31 March 2009
	Notes	£m	£m	£m
Cash flows from operating activities
Cash generated from operations	15	38.2	38.2	125.5
Interest received		1.3	3.2	6.3
Interest paid		(0.5)	(1.0)	(2.2)
Income tax paid		(9.3)	(5.1)	(12.8)
Net cash generated from operating activities		29.7	35.3	116.8
Cash flows from investing activities
Distributions received from Joint Ventures		-	1.2	1.3
Net loans to Joint Ventures		(4.6)	(7.1)	(6.9)
Acquisition of subsidiaries
- Consideration		-	(0.2)	(3.5)
- Cash acquired		-	-	1.0
Deferred consideration payments		-	-	(0.8)
Purchases of property, plant and equipment		(3.5)	(7.7)	(18.2)
Proceeds from disposals of property, plant
and equipment		1.2	0.5	1.1
Proceeds from disposals of investment in
subsidiary		-	-	0.2
Proceeds from disposal of Joint Venture		-	2.5	2.5
(Purchase)/disposal of financial assets		(8.4)	(3.5)	1.0
Purchases of intangible assets		(1.2)	(6.9)	(10.5)
Net cash used in investing activities		(16.5)	(21.2)	(32.8)
Cash flows from financing activities
Redemption of loan notes		(0.4)	-	-
Repayment of short-term loans	12	-	(3.5)	(4.3)
Finance lease principal payments	12	(2.9)	(2.0)	(4.5)
Purchase of own shares by Employee
Benefit Trusts		(7.2)	-	-
Share buyback		-	(12.3)	(12.3)
Equity dividends paid to shareholders	9	(16.7)	(16.1)	(24.7)
Net cash used in financing activities		(27.2)	(33.9)	(45.8)
Net (decrease)/ increase in cash, cash
equivalents and bank overdrafts		(14.0)	(19.8)	38.2
Cash, cash equivalents and bank overdrafts
at beginning of period		209.7	154.5	154.5
Exchange movements		(5.9)	1.8	17.0
Cash, cash equivalents and bank
overdrafts at end of period		189.8	136.5	209.7

The accompanying notes form an integral part of this condensed consolidated interim financial information.

Consolidated statement of changes in equity as at 30 September 2009 (unaudited)

		Share		Retained
	Share	premium	Merger	(loss) /
	capital	account	reserve	earnings	Total
	£m	£m	£m	£m	£m
Balance at 1 April 2009	0.5	62.4	8.9	(115.3)	(43.5)
Total comprehensive income for the period	-	-	-	(66.1)	(66.1)
Dividends	-	-	-	(16.7)	(16.7)
Share-based movements (net of tax)	-	-	-	4.2	4.2
Employee benefit trusts	-	-	-	(7.2)	(7.2)
Balance at 30 September 2009	0.5	62.4	8.9	(201.1)	(129.3)

		Share		Retained
	Share	premium	Merger	(loss) /
	capital	account	reserve	earnings	Total
	£m	£m	£m	£m	£m
Balance at 1 April 2008	0.5	62.4	8.9	(95.2)	(23.4)
Total comprehensive income for the period	-	-	-	25.7	25.7
Dividends	-	-	-	(16.1)	(16.1)
Share-based movements (net of tax)	-	-	-	4.8	4.8
Share buy back	-	-	-	(11.4)	(11.4)
Balance at 30 September 2008	0.5	62.4	8.9	(92.2)	(20.4)

		Share		Retained
	Share	premium	Merger	(loss) /
	capital	account	reserve	earnings	Total
	£m	£m	£m	£m	£m
Balance at 1 April 2008	0.5	62.4	8.9	(95.2)	(23.4)
Total comprehensive income for the period	-	-	-	8.1	8.1
Dividends	-	-	-	(24.7)	(24.7)
Share-based movements (net of tax)	-	-	-	8.0	8.0
Share buyback	-	-	-	(11.5)	(11.5)
Balance at 31 March 2009	0.5	62.4	8.9	(115.3)	(43.5)

The accompanying notes form an integral part of this condensed consolidated interim financial information.

Notes to the condensed consolidated interim financial information for the six months ended 30 September 2009 (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 interim financial information was approved for issue on 25 November 2009.

This condensed consolidated interim financial information does not comprise statutory accounts within the meaning of Section 237 of the Companies Act 1985. Statutory accounts for the year ended 31 March 2009 were approved by the Board of directors on 16 June 2009 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.

This condensed consolidated interim financial information has been reviewed, not audited.

2. Basis of preparation

This condensed consolidated interim financial information for the six months ended 30 September 2009 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 interim financial information should be read in conjunction with the annual financial statements for the year ended 31 March 2009, which have been prepared in accordance with IFRSs as adopted by the European Union.

3. Accounting policies

Except as described below, the accounting policies applied are consistent with those of the annual financial statements for the year ended 31 March 2009, as described in those annual financial statements.

Taxes on income in the interim period are accrued using the tax rate that would be applicable to expected total annual earnings.

The following new standards and amendments to standards are mandatory for the first time for the financial year beginning 1 April 2009.

* IAS 1 (revised), 'Presentation of financial statements'. The revised standard prohibits the presentation of items of income and expenses (that is 'non-owner changes in equity') in the statement of changes in equity, requiring 'non-owner changes in equity' to be presented separately from owner changes in equity. All 'non-owner changes in equity' are required to be shown in a performance statement.

Entities can choose whether to present one performance statement (the statement of comprehensive income) or two statements (the income statement and the statement of comprehensive income).

The Group has elected to present two statements: an income statement and a statement of comprehensive income. The interim financial statements have been prepared under the revised disclosure requirements.

* IFRS 8, 'Operating segments'. IFRS 8 replaces IAS 14, 'Segment reporting'. It requires a 'management approach' under which segment information is presented on the same basis as that used for internal reporting purposes. This has resulted in an increase in the number of reportable segments presented as the previously reported Middle East, China and Europe segment has been split into Middle East and India and China and Europe.

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker has been identified as the Chief Executive and the Group Finance Director.

The following new standards, amendments to standards and interpretations are mandatory for the first time for the financial year beginning 1 April 2009, but are not currently relevant for the Group.

* IFRIC 13, 'Customer loyalty programmes'.

* IFRIC 15, 'Agreement for the construction of real estate'.

* IFRIC 16, 'Hedges of a net investment in a foreign operation'.

* IAS 23 (revised), 'Borrowing costs'.

* IAS 39 (amendment), 'Financial instruments: Recognition and measurement'.

The following new standards, amendments to standards and interpretations have been issued, but are not yet effective for the financial year beginning 1 April 2009 and have not been early adopted:

* IFRS 3 (revised), 'Business combinations' and consequential amendments to IAS 27, 'Consolidated and separate financial statements', IAS 28, 'Investments in associates' and IAS 31, 'Interests in joint ventures', effective prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after 1 July 2009. Management is assessing the impact of the new requirements regarding acquisition accounting, consolidation and associates on the group.

The revised standard continues to apply the acquisition method to business combinations, with some significant changes. For example, all payments to purchase a business are to be recorded at fair value at the acquisition date, with contingent payments classified as debt subsequently re-measured through the statement of comprehensive income. There is a choice on an acquisition-by-acquisition basis to measure the minority interest in the acquiree either at fair value or at the minority interest's proportionate share of the acquiree's net assets. All acquisition-related costs should be expensed. The group will apply IFRS 3 (revised) to all business combinations from 1 April 2010, subject to endorsement by the EU.

* IFRIC 17, 'Distributions of non-cash assets to owners', effective for annual periods beginning on or after 1 July 2009. This is not currently applicable to the Group, as it has not made any non-cash distributions.

* IFRIC 18, 'Transfers of assets from customers', effective for transfers of assets received on or after 1 July 2009. This is not currently applicable to the Group, as it has not received any assets from customers.

4. Segment 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.

						Share of
						post-tax
					profit/(loss)
		Inter-		Operating		from
	Total	segment		profit /	Operating	Joint	Total
Six months to	revenue	revenue	Revenue	(loss)	margin	Ventures	assets
30 September 2009	£m	£m	£m	£m	%	£m	£m
Design & Engineering   Solutions	221.0	(23.9)	197.1	13.0	6.6%	-	105.1
Highways & Transportation	151.4	(8.0)	143.4	12.0	8.4%	(0.2)	53.8
Rail	96.4	(2.5)	93.9	6.4	6.8%	-	42.5
Middle East & India	85.3	(6.7)	78.6	6.5	8.3%	-	208.3
China & Europe	68.6	(3.2)	65.4	2.7	4.1%	-	90.6
Management & Project   Services	105.0	(1.7)	103.3	7.0	6.8%	0.3	63.2
Asset Management	26.7	(0.9)	25.8	0.7	2.7%	(0.1)	(0.9)
Total continuing segments	754.4	(46.9)	707.5	48.3	6.8%	-	562.6
Group items:
Joint Ventures reported   above	(6.3)	-	(6.3)	0.2
Unallocated central items	-	-	-	2.6
Unallocated assets							273.5
Total for Group	748.1	(46.9)	701.2	51.1	7.3%	-	836.1

						Share of
						post-tax
						profit/(loss)
		Inter-		Operating		from
	Total	segment		profit /	Operating	Joint	Total
Six months to	revenue	revenue	Revenue	(loss)	margin	Ventures	assets
30 September 2008	£m	£m	£m	£m	%	£m	£m
Design & Engineering   Solutions	212.0	(9.4)	202.6	16.9	8.3%	0.1	115.7
Highways & Transportation	147.6	(9.6)	138.0	8.4	6.1%	0.3	56.4
Rail	108.1	(8.5)	99.6	7.1	7.1%	-	51.0
Middle East & India	94.1	(12.1)	82.0	8.7	10.6%	-	178.2
China & Europe	56.2	(3.2)	53.0	1.3	2.5%	-	66.7
Management & Project   Services	118.5	(5.2)	113.3	7.5	6.6%	-	74.1
Asset Management	27.7	(1.1)	26.6	(1.2)	(4.5)%	-	10.9
Total continuing segments	764.2	(49.1)	715.1	48.7	6.8%	0.4	553.0
Group items:
Joint Ventures reported above	(4.3)	-	(4.3)	(0.5)
Unallocated central items	-	-	-	-
Unallocated assets							153.7
Total for Group	759.9	(49.1)	710.8	48.2	6.8%	0.4	706.7

						Share of
						post-tax
						profit/(loss)
		Inter-		Operating		from
	Total	segment		profit /	Operating	Joint	Total
Year to	revenue	revenue	Revenue	(loss)	margin	Ventures	assets
31 March 2009	£m	£m	£m	£m	%	£m	£m
Design & Engineering   Solutions	435.2	(16.9)	418.3	31.6	7.6%	0.1	122.0
Highways & Transportation	321.3	(19.8)	301.5	19.9	6.6%	(0.4)	60.3
Rail	210.2	(14.1)	196.1	17.0	8.7%	-	57.1
Middle East & India	206.0	(20.0)	186.0	17.3	9.3%	-	191.6
China & Europe	123.9	(6.7)	117.2	4.9	4.2%	-	81.9
Management & Project   Services	241.0	(11.0)	230.0	18.9	8.2%	0.2	72.8
Asset Management	50.5	(2.9)	47.6	(6.8)	(14.3)%	0.3	(1.8)
Total continuing segments	1,588.1	(91.4)	1,496.7	102.8	6.9%	0.2	583.9
Group items:
Joint Ventures reported above	(9.5)	-	(9.5)	0.3
Unallocated central items	-	-	-	-
Unallocated assets							244.8
Total for Group	1,578.6	(91.4)	1,487.2	103.1	6.9%	0.2	828.7

Unallocated assets primarily consist of UK financial assets, UK cash and cash equivalents and deferred tax on defined benefit pension schemes that cannot be readily allocated to segments.

The £2.6m unallocated central item reported in the six months to 30 September 2009 relates to a curtailment gain resulting from changes made to future benefits receivable on the Railways Pension Scheme (note 13).

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

	Six months to	Six months to	Year to
	30 Sept 2009	30 Sept 2008	31 March 2009
	£m	£m	£m
Operating profit	51.1	48.2	103.1
Profit on disposal of Joint Venture	-	2.5	2.5
Share of post-tax profit from Joint Ventures	-	0.4	0.2
Profit from operations	51.1	51.1	105.8
Finance income	1.7	3.4	6.7
Finance cost	(9.3)	(4.5)	(9.8)
Net finance cost	(7.6)	(1.1)	(3.1)
Profit before taxation	43.5	50.0	102.7
Income tax expense	(9.6)	(11.2)	(18.5)
Profit for the period attributable to
equity shareholders	33.9	38.8	84.2

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 from Joint Ventures

	Six months to	Six months to	Year to
	30 Sept 2009	30 Sept 2008	31 March 2009
	£m	£m	£m
Revenue	12.5	28.1	45.2
Operating expenditure	(12.2)	(27.6)	(44.7)
Operating profit	0.3	0.5	0.5
Finance cost	(2.8)	(2.7)	(5.4)
Finance income	2.4	2.7	5.1
(Loss)/profit before taxation	(0.1)	0.5	0.2
Income tax credit/(expense)	0.1	(0.1)	-
Share of post-tax profit from Joint
Ventures	-	0.4	0.2

7. Net finance cost/(income)

	Six months to	Six months to	Year to
	30 Sept 2009	30 Sept 2008	31 March 2009
	£m	£m	£m
Interest payable on borrowings	0.2	0.2	-
Hire purchase and finance leases	0.4	0.5	1.0
Unwinding of discount	0.5	0.6	1.0
Net finance cost on post-employment benefit   Liabilities (note 13)	8.0	3.2	6.6
Other finance costs	0.2	-	1.2
Finance cost	9.3	4.5	9.8
Interest receivable on short-term deposits	(0.4)	(1.5)	(2.9)
Income from held at fair value financial assets	(0.5)	(1.0)	(2.2)
Unwinding of discount	(0.2)	(0.2)	(0.4)
Other finance income	(0.6)	(0.7)	(1.2)
Finance income	(1.7)	(3.4)	(6.7)
Net finance cost	7.6	1.1	3.1

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 2009 is calculated on the estimated average annual normalised effective income tax rate of 22.0% (six months ended 30 September 2008: 23.5% and year ended 31 March 2009: 18.5%). This effective rate differs from the UK standard corporation tax rate of 28% (six months ended 30 September 2008: 28% and year ended 31 March 2009: 28%) 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. Dividends

	Six months	Six months	Year to
	to 30 Sept	to 30 Sept	31 March
	2009	2008	2009
	£m	£m	£m
Final dividend paid for year ended 31 March 2009 (2008)	16.7	16.1	16.1
Interim dividend paid for period ended 30 September 2008	-	-	8.6
Dividends recognised in the period / year	16.7	16.1	24.7
Interim dividend declared for period ended 30 Sept 2009 (2008)	9.0	8.6	8.6
Final dividend proposed for year ended 31 March 2009	-	-	16.9
Dividends relating to the period / year	9.0	8.6	25.5

	Six months	Six months	Year to
	to 30 Sept	to 30 Sept	31 March
	2009	2008	2009
	pence	pence	pence
Final dividend paid for year ended 31 March 2009 (2008)	17.25p	16.50p	16.50p
Interim dividend paid for period ended 30 September 2008	-	-	8.75p
Dividends recognised in the period / year	17.25p	16.50p	25.25p
Interim dividend declared for period ended 30 Sept 2009 (2008)	9.25p	8.75p	8.75p
Final dividend proposed for year ended 31 March 2009	-	-	17.25p
Dividends relating to the period / year	9.25p	8.75p	26.00p

10. 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 2009	30 Sept 2008	31 March 2009
	number ('000)	number ('000)	number ('000)
Number of shares
Weighted average number of shares used in basic EPS	97,408	97,837	97,790
Effect of dilutive securities - share options	1,537	1,753	1,516
Weighted average number of shares used in diluted EPS	98,945	99,590	99,306
	£m	£m	£m
Earnings
Profit for the period attributable to equity shareholders	33.9	38.8	84.2

	Six months to	Six months to	Year to
	30 Sept 2009	30 Sept 2008	31 March 2009
	pence	pence	pence
Basic earnings per share	34.8	39.7	86.1
Diluted earnings per share	34.3	39.0	84.8

11. Capital expenditure

Additions to property, plant and equipment during the six months ended 30 September 2009 amounted to £3.6m (30 September 2008: £9.5m; 31 March 2009: £22.4m). The net book value of property, plant and equipment disclosed at 30 September 2009 amounted to £39.8m (30 September 2008: £43.6m; 31 March 2009: £46.6m). The net book value of disposals during the six months ended 30 September 2009 amounted to £1.9m (30 September 2008: £0.3m; 31 March 2009: £1.8m). The Group had £3.2m of capital expenditure contracted for but not incurred at 30 September 2009.

12. Borrowings

		30 Sept 2009	30 Sept 2008	31 March 2009
		£m	£m	£m
Current
Hire purchase and finance leases		4.1	4.3	4.8
Loan notes		3.1	1.2	2.8
		7.2	5.5	7.6
Non-current
Hire purchase and finance leases		6.8	9.5	8.9
Loan notes		-	2.9	0.6
		6.8	12.4	9.5
Movements in borrowings are analysed as follows:
		Six months to	Six months to	Year to
		30 Sept 2009	30 Sept 2008	31 March 2009
		£m	£m	£m
At beginning of period		17.1	21.4	21.4
Unwind of discount		0.1	0.2	0.3
Additions to finance leases		0.1	1.8	4.2
Repayment of borrowings		(0.4)	(3.5)	(4.3)
Repayment of finance leases		(2.9)	(2.0)	(4.5)
At end of period		14.0	17.9	17.1

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

		30 Sept 2009	30 Sept 2008	31 March 2009
		£m	£m	£m
Between two and five years		58.8	74.2	75.0

13. Post-employment benefit liabilities

The Group's post-employment benefit liabilities are analysed below. In the period to 30 September 2008 the Group's other post-employment benefit liabilities were previously disclosed within trade and other payables and have been restated. The restatement has no impact on the statement of comprehensive income of the Group.

		30 Sept 2009	30 Sept 2008	31 March 2009
		£m	£m	£m
Retirement benefit liabilities		418.3	208.6	298.4
Other post-employment benefit liabilities		11.3	9.7	13.1
		429.6	218.3	311.5

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 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 Scheme in the Republic of Ireland, which is a final salary funded defined benefit scheme, and a range of defined contribution schemes or equivalent.

At 31 March 2009 the defined benefit section of 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 1 April 2009.

The Atkins Pension Plan is also closed to the future accrual of benefit; all defined benefit members of the Atkins Pension Plan 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 section ceased for these members, the link to final salary remains whilst employed by Atkins Limited (unless opting out or retiring if sooner).

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. Following consultation 83 members selected to cap their future benefits which has resulted in a curtailment gain in the period. The remaining members retained future benefits linked to final salary.

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
	2009	2008	2009
Price inflation	3.10%	3.60%	3.00%
Rate of increase of pensions in payment
Limited Price Indexation	3.10%	3.60%	3.00%
Limited Price Indexation to 2.5%	2.50%	2.50%	2.50%
Fixed	5.00%	5.00%	5.00%
Rate of increase in salaries	4.60%	5.10%	4.50%
Rate of increase for deferred pensioners	3.10%	3.60%	3.00%
Discount rate	5.30%	6.90%	6.30%
Expected rate of return on plan assets	6.60%	7.30%	6.60%
Expected rate of social security increases	3.10%	3.60%	3.00%
Longevity at age 65 for current pensioners
Men	22.3 years	22.2 years	22.3 years
Women	24.7 years	24.6 years	24.7 years
Longevity at age 65 for future pensioners (current age 45)
Men	24.2 years	24.1 years	24.2 years
Women	26.6 years	26.5 years	26.6 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
	2009	2008	2009
	£m	£m	£m
Cost of sales
Current service cost	3.0	4.8	8.9
Curtailment gain	(2.6)	-	-
Total charge	0.4	4.8	8.9
Finance cost / (income)
Finance cost	31.0	32.7	65.6
Expected return on plan assets	(23.5)	(29.8)	(59.7)
Net finance cost	7.5	2.9	5.9
Total charge to income statement for defined benefit schemes	7.9	7.7	14.8
Statement of recognised income and expense
Gain/(loss) on pension scheme assets	98.9	(103.2)	(194.2)
Changes in assumptions	(230.1)	82.5	71.4
Actuarial loss	(131.2)	(20.7)	(122.8)
Deferred tax credited to equity	36.7	5.8	34.3
Actuarial loss (net of deferred tax)	(94.5)	(14.9)	(88.5)

Retirement benefit liabilities comprise the following:

	30 Sept	30 Sept	31 March
	2009	2008	2009
	£m	£m	£m
Defined benefit obligation	(1,253.9)	(967.7)	(1,003.4)
Fair value of plan assets	835.6	759.1	705.0
Retirement benefit liabilities	(418.3)	(208.6)	(298.4)
Deferred tax on retirement benefit liabilities	116.7	57.8	83.0
Post-tax retirement benefit liabilities	(301.6)	(150.8)	(215.4)

Under the Atkins Pension Plan there are retirement benefit liabilities of £333.0m (30 September 2008: £171.4m; 31 March 2009: £232.6m) representing £239.7m after deferred tax (30 September 2008: £123.4m; 31 March 2009: £167.6m).

Under the Railways Pension Scheme there are retirement benefit liabilities of £82.8m (30 September 2008: £34.7m; 31 March 2009: £63.0m) representing £59.6m after deferred tax (30 September 2008: £25.0m; 31 March 2009: £45.4m).

Under other defined benefit schemes there are retirement benefit liabilities of £2.5m (30 September 2008: £2.5m; 31 March 2009: £2.8m). 

Movements in the retirement benefit liabilities are as follows:

	Six months	Six months	Year to
	to 30 Sept	to 30 Sept	31 March
	2009	2008	2009
	£m	£m	£m
Retirement benefit liabilities at beginning of period	(298.4)	(213.1)	(213.1)
Service cost	(3.0)	(4.8)	(8.9)
Net finance cost	(7.5)	(2.9)	(5.9)
Curtailment gain	2.6	-	-
Contributions	19.2	32.9	52.5
Actuarial loss	(131.2)	(20.7)	(122.8)
Difference on exchange	-	-	(0.2)
Retirement benefit liabilities at end of period	(418.3)	(208.6)	(298.4)

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 8.0%	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 3.0%	increase 2.0%

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

b) Other post-employment benefit liabilities

The Group operates unfunded gratuity schemes within certain of its non-UK businesses. Members of the 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'.

	Six months	Six months	Year to
	to 30 Sept	to 30 Sept	31 March
	2009	2008	2009
	£m	£m	£m
Other post-employment obligation at beginning of period	13.1	6.2	6.2
Service cost	0.5	1.9	4.0
Interest cost	0.5	0.3	0.7
Benefit payments	(1.5)	(0.5)	(1.0)
Difference on exchange	(1.3)	1.8	3.2
Other post-employment obligation at end of period	11.3	9.7	13.1

The main assumptions used for the IAS 19 valuation of other post-employment benefits are listed in the table below:

	Six months	Six months	Year to
	to 30 Sept	to 30 Sept	31 March
	2009	2008	2009
Discount rate	9%	9%	9%
Salary inflation	7%	7%	7%
Average remaining service period	2 years	2 years	2 years

14. Ordinary shares

	30 Sept 2009 £m	30 Sept 2008  £m	31 March 2009  £m
Authorised ordinary shares of 0.5p each
At beginning of period	0.8	0.8	0.8
Increase in period	0.1	-	-
At end of period	0.9	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

At the Annual General Meeting (AGM) held on Wednesday 9 September 2009 a shareholder resolution was passed by which the authorised share capital of the Company was increased by 30,000,000 ordinary shares of 0.5 pence each. The authorised share capital at 30 September 2009 was therefore 180,000,000 ordinary shares of 0.5 pence each (30 September 2008: 150,000,000; 31 March 2009: 150,000,000). The number issued, allotted and fully paid up shares at 30 September 2009 is 104,451,799 (30 September 2008: 104,451,799; 31 March 2009: 104,451,799).

Also at the AGM held on Wednesday 9 September 2009, shareholder authority for the Company to purchase up to a maximum of 10,011,000 of its own shares (representing approximately 10% of the issued share capital of the Company on 16 June 2009) was renewed. During the six months to 30 September 2009 no shares were purchased (30 September 2008: 1,123,000 shares at a cost of £11.4m including fees and stamp duty; 31 March 2009: 1,123,000 shares at a cost of £11.4m including fees and stamp duty). 

At 30 September 2009 a total of 4,341,000 ordinary shares of 0.5p each were held as treasury shares (30 September 2008: 4,341,000; 31 March 2009: 4,341,000). These shares, which represent approximately 4.2% of the called up share capital of the Company (30 September 2008: 4.2%; 31 March 2009: 4.2%) have not been cancelled and represent a deduction from shareholders' equity.

No further shares have been purchased between 30 September 2009 and the date of this condensed consolidated interim financial information.

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

	Six months	Six months	Year to
	to 30 Sept	to 30 Sept	31 March
	2009	2008	2009
	£m	£m	£m
Profit for the period from continuing operations	33.9	38.8	84.2
Adjustments for:
Income tax	9.6	11.2	18.5
Finance income (note 7)	(1.7)	(3.4)	(6.7)
Finance cost (note 7)	9.3	4.5	9.8
Share of post-tax profit from Joint Ventures (note 6)	-	(0.4)	(0.2)
Profit on disposal of Joint Venture (note 5)	-	(2.5)	(2.5)
Depreciation charges	7.7	11.6	20.7
Amortisation of intangible assets	3.9	4.4	12.7
Release of deferred income	(0.1)	(0.1)	(0.1)
Deferred income received in year	1.9	-	-
Share based payment charge	4.1	4.8	8.9
Pensions curtailment gain	(2.6)	-	-
Loss/(profit) on disposal of property, plant and equipment	0.7	(0.1)	0.7
Movement in provisions	(1.1)	0.8	9.2
Movement in pensions	(16.3)	(28.1)	(40.6)
Movement in working capital	(11.1)	(3.3)	10.9
Cash generated from continuing operations	38.2	38.2	125.5

16. Contingent liabilities

The Group has given indemnities in respect of overseas office overdrafts, performance bonds, advance payment bonds, letters of credit and import duty guarantees issued on its behalf. The amount outstanding at 30 September 2009 was £70.9m (30 September 2008: £58.2m; 31 March 2009: £61.5m) including £25.0m in respect of Metronet (30 September 2008: £25.0m; 31 March 2009: £25.0m) and £16.1m in respect of Connect Plus M25 (30 September 2008: £nil; 31 March 2009: £nil). The indemnities which arose in the ordinary course of business, are not expected to result in any material financial loss.

17. Related party transactions

Details of the directors' shareholdings, share options and remuneration are disclosed in the 31 March 2009 financial statements. 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.

18. Seasonality

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

Independent review report to WS Atkins plc

Introduction

We have been engaged by the Company to review the condensed consolidated interim financial information in the half year financial report for the six months ended 30 September 2009, which comprises the consolidated income statement, consolidated statement of comprehensive income, consolidated balance sheet, consolidated statement of cash flows, consolidated statement of changes in equity and related notes. We have read the other information contained in the half year financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed consolidated interim financial information.

Directors' responsibilities

The half year financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half year financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority.

As disclosed in note 2, the annual financial statements of the Group are prepared in accordance with IFRSs as adopted by the European Union. The condensed consolidated interim financial information included in this half year financial report has been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union.

Our responsibility

Our responsibility is to express to the Company a conclusion on the condensed consolidated interim financial information in the half year financial report based on our review. This report, including the conclusion, has been prepared for and only for the purpose of the Disclosure and Transparency Rules of the Financial Services Authority and for no other purpose. We do not, in producing this report, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed consolidated interim financial information in the half year financial report for the six months ended 30 September 2009 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority.

PricewaterhouseCoopers LLP

Chartered AccountantsLondon

25 November 2009

END

ENDIR EANFLADENFFE

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