Half Yearly Report

Half year financial report for the six months ended 30 September 2015

Good results, with strong revenue and profit growth.

Design, engineering and project management consultancy WS Atkins plc (Atkins or the Group) today announces its unaudited results for the six months ended 30 September 2015.

FINANCIAL SUMMARY

HIGHLIGHTS

Commenting on the results, Uwe Krueger, chief executive officer, said:

'This is another good set of results with strong growth in both revenue and underlying profitability. Our outlook for the full year remains unchanged. While short-term market uncertainty exists in some of our sectors, our strategic focus has put us in a strong position to benefit from longer-term growth. As urbanisation increases, infrastructure spending across the globe is predicted to grow significantly in the medium-term and we are well placed to benefit from this investment.'

Notes to editors

1. Atkins

Atkins (www.atkinsglobal.com) is one of the world's most respected design, engineering and project management consultancies, employing some 18,600 people across the UK, North America, Middle East, Asia Pacific and Europe. We build long term trusted partnerships to create a world where lives are enriched through the implementation of our ideas. You can view Atkins' recent projects on our website.

2. Attachments

Attached to this 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 today at 0830. Dial-in details are available from +44 20 7121 2693 for those wishing to join the presentation by conference call. A webcast of the presentation will be available via the Company's website, www.atkinsglobal.com.

4. Cautionary Statement

This announcement has been prepared for the shareholders of Atkins as a whole and its sole purpose and use is to assist shareholders to exercise their governance rights. Atkins and its directors and employees are not responsible for any other purpose or use or to any other person in relation to this announcement and their responsibility to shareholders shall be limited to that which is imposed by statute.

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

OVERVIEW

Results

The Group has delivered good results for the six months to 30 September 2015, reporting underlying operating profit of £59.0m (2014: £53.0m), up 11.3% year on year. Revenue for the six months rose 8.8% to £904.6m (2014: £831.4m). This year on year increase in revenue includes the impact of the prior year acquisitions of Nuclear Safety Associates, Houston Offshore Engineering and Terramar.

Staff numbers were 18,609 at the end of September 2015, 0.8% higher than at 31 March 2015 and 4.0% higher than the same time last year.

Underlying profit before tax of £55.8m (2014: £46.9m) is arrived at after adjusting for amortisation of acquired intangible assets of £3.9m (2014: £1.2m), deferred acquisition payments of £1.6m (2014: £nil), impairment of goodwill of £nil (2014: £2.8m), loss on sale of businesses £3.0m (2014: profit of £0.5m) and exceptional property disposal profit of £6.5m (2014: £4.4m transaction costs). Underlying profit before tax includes the benefit of £2.7m of research and development expenditure credit following early adoption of new rules in the UK in the second half of the prior year. In the prior half year the equivalent benefit was shown as a reduction in the Group's tax charge.

Underlying diluted earnings per share were up 13.5% to 42.8p (2014: 37.7p).

Our UK and Europe business has delivered significantly improved first half results, despite difficult trading conditions continuing for our aerospace business. The recent announcement by the UK Government about the creation of the National Infrastructure Commission will help build consensus behind the funding and delivery of the UK's critical national infrastructure and harness cross party political support to gain certainty around the infrastructure pipeline. Further progress has been made on the portfolio optimisation pillar of our strategy, with the sale of our Portuguese business in June. North America had a mixed first half. Significant bidding activity in support of growth has impacted our margin performance but is starting to yield results with a recent major contract win in Nevada. Our Middle East business has performed well in the first half of the year, with strong growth in revenue and operating profit. Client decision-making is slower, with some increased uncertainty around property and infrastructure projects. Despite the previously highlighted slowdown in mainland China, our Asia Pacific business has reported in line with our expectations. Energy has had a difficult half year, with a good performance in nuclear, power and renewables but challenges in some of our oil and gas markets. Our global design centres continue to provide an important pool of expertise that is utilised across the Group, particularly on major projects.

The Group's balance sheet remains strong with net funds at 30 September 2015 of £141.1m (September 2014: £155.3m). The reduction of £38.2m in net funds since the year end reflects the usual first half working capital outflow.

Outlook for the year

The Group has delivered a good first half performance and the outlook for the full year remains unchanged.

Dividend

The Board has declared an interim dividend of 11.7p per share, representing an increase of 6.4% on last year. The interim dividend will be paid on 8 January 2016 to all shareholders on the register on 27 November 2015.

BUSINESS REVIEW

United Kingdom and Europe

Our UK and Europe business has delivered significantly improved first half results. Revenue in the region has risen to £458.7m (2014: £428.3m), at a margin of 6.5% (2014: 5.2%).

Closing staff numbers rose around 5% to 9,865, (UK: 9,155; Europe: 710), despite the previously disclosed rightsizing of our aerospace business and the sale of our 48 person business in Portugal.

The UK business reported a 7.0% increase in revenue to £426.4m and operating profit of £29.1m. Margins improved to 6.8% (2014: 5.7%) as our transportation and water, ground and environment businesses delivered a better first half performance against a challenging trading period last year. Our aerospace business has secured some recent wins and performance is now stabilising. Some £2.7m (2014: £nil) of the Group's research and development expenditure credit was recognised in the first half, which was shown in the tax line in prior years. The transition to our new simplified UK organisational structure took effect from the beginning of this financial year and is expected to deliver both revenue and margin improvements.

In September, the newly transformed Birmingham New Street station, for which Atkins was lead designer, opened successfully.

Our appointment by Highways England as one of its key suppliers on the Collaborative Delivery Framework (CDF) is proving successful and we are well positioned to bid on the largest projects. Under the CDF, Atkins and CH2M were awarded the detailed design contract for the £1.5bn A14 Cambridge to Huntingdon upgrade programme, and our joint venture with Jacobs was awarded the design contract for three smart motorway schemes. We also continue to deliver a range of projects for Network Rail, including the successful commissioning of the Stafford Area Improvement Programme.

Water, ground and environment has enjoyed a good first half with a healthy pipeline of work from water utility clients, including Thames Water, Severn Trent Water and United Utilities, to deliver their programmes for the 2015 to 2020 regulatory period (AMP6). We are delighted to have also recently been appointed by Scottish Water to provide technical consultancy support, subject to contract finalisation. We are seeing increasing opportunities to cross-sell our skills and expertise in this business into our transportation and energy markets. For example, the work we have undertaken on Crossrail and High Speed 2, and recent awards on major highways and other rail projects, are drawing on our specialist environmental and ground engineering teams.

Design and engineering performed well with continued growth in its core education and defence markets. In the education sector, the Priority Schools and Academies programmes and our strong, standardised design capability continue to lead to significant opportunities. Our airports business is delivering significant programmes of work at both Heathrow and Gatwick. We continue to support initial nuclear new build infrastructure work in the UK, including EDF Energy's new Hinkley Point C reactor.

Aerospace, defence, security and technology had a slow start to the year with some aerospace workload cancelled at short notice. The market is showing signs of stabilising but we have taken appropriate action to scale our teams to suit the market conditions. In the period we have further reduced our aerospace headcount, particularly in North America.

Our defence and security businesses traded well during the period, with ongoing contracts to deliver security work for central Government. Heathrow Airport's IT outsourcing contract, in partnership with Capgemini, allows us to leverage our position in aviation and we have an established and strong capability in holistic security where our team is delivering a range of high profile projects, including a number of cyber security assignments for multinational private sector clients.

Faithful+Gould had another good first half, with continued appointments for higher education, universities and student accommodation through the Scape Asset Management, Surveying and Design Services public sector framework. For example, we have been appointed by the University of Edinburgh to work on its new International Business School. We continue to support EDF Energy on Hinkley Point C with our new appointment for contract management and administration services, which replaces our previous appointment that expired in July 2015. Activity in the London and southeast commercial property sector increased and we were pleased to win Construction Consultant/Surveyor of the Year at the Building Awards 2015.

In Europe, revenue rose 8.4% to £32.3m, with operating profit of £0.7m and operating margin improved to 2.2% (2014: (1.0)%). Our European business is primarily focused on the rail and highways infrastructure markets in Scandinavia. In June, we made further progress on our portfolio optimisation strategy, with the sale of our 48 person business in Portugal.

We have successfully integrated Terramar, a project management consultancy business, which has diversified our client base in Scandinavia. Our core markets in Scandinavia remain well funded, with a strong pipeline of infrastructure projects and increasing opportunities to work with local contractors as well as public bodies.

Outlook

We see a healthy pipeline of opportunities in the UK market as the Government continues its commitment to infrastructure spend and foreign investment into the UK energy market increases. However, we will monitor any potential investment impact from the Autumn Comprehensive Spending Review and the Strategic Defence and Security Review.

We have secured work in hand at 30 September 2015 of 83% (2014: 85%) of this year's forecast revenue, which gives us confidence as we look into the second half.

North America

Our North American business had a mixed first half with a 16.7% decrease in operating profit, at a margin of 4.8% (2014: 6.0%). Significant bidding activity in support of growth has impacted our margin but is beginning to yield results with the start of a portfolio shift towards larger project and programme awards. In early October, we were delighted to win the $45m design contract on Project NEON, the widening of I-15 for the Nevada Department of Transportation, as part of the Kiewit Infrastructure West team. This represents the business's largest single project award since being acquired by Atkins in 2010.

Headcount reduced slightly year on year to 2,752 (2014: 2,786) and was flat in the first half. We anticipate headcount will increase in the second half in response to increasing volume. As our client-based organisational model matures, our technical professional organisation is seeing steady improvement in productivity.

Public and private is working to reshape and position the business for more substantial and sustainable growth built around larger, longer-term projects. In the key focus area of major programme management, there were notable wins for Miami Dade County, Cobb County and Broward County Schools.

While the federal market continues to face political turmoil, budget restrictions, and global economic uncertainty, we are pursuing task order assignments under existing contracts with the Federal Emergency Management Agency, the Army Corps of Engineers and the National Guard.

In aviation, we provide architectural and engineering services at major airports such as New Orleans, Los Angeles, Orlando and Atlanta, with an ongoing focus on securing new, larger projects and programmes. Our Faithful+Gould business continues to perform well with projects at San Francisco Airport and for United Airlines.

Overall, Faithful+Gould has seen an improved start to the year with productivity up on the second half of last year. In the energy sector, its work continues with Ontario Power Generation, Bruce Power and BP, and with PacifiCorp on electricity transmission. We have also been appointed on new projects in the hospitality and manufacturing sectors.

Outlook

We see stable market conditions ahead, while federal funding remains uncertain. The benefits from our simplified organisational structure continue to deliver improved efficiency and we believe this, coupled with volume growth, will deliver margin improvement in the second half. Work in hand at 30 September 2015 is 83% of this year's forecast revenue (2014: 93%). Recent project wins, together with a number of material frameworks that should deliver work in the second half, give us confidence for the full year.

Middle East

Our Middle East business has performed well in the first half of the year, with revenue up 23.8% to £118.8m (2014: £96.0m) and a slightly improved operating margin of 9.5% (2014: 9.3%). We continue to deliver design packages on major projects and programmes in rail, infrastructure and property in our focus regions of the United Arab Emirates (UAE), Qatar and the Kingdom of Saudi Arabia (KSA).

Headcount at 2,557 (2014: 2,428) was up over 5% year on year but has reduced slightly since 31 March.

Client decision-making is slower, with some increased uncertainty around property and infrastructure projects. Nevertheless, we believe the longer-term need to invest in strategically important infrastructure development that supports economic growth and diversification will continue to drive demand for our services.

Good progress continues on the design delivery for our major metro projects, including Riyadh Metro and Doha Metro Gold Line and Red Line South. Our reputation for delivery and innovation, and the relationships that we have built with contractors, positions us well for future metro opportunities in the region.

Property sector activity in the UAE remains focused on expanding Dubai's offering to visitors and residents, especially where linked to the hosting of Expo 2020. Current projects include the Dubai Opera, which is scheduled for completion and opening in 2016.

In Qatar, we are working with the government towards meeting its National Vision 2030. The success of our advisory work on the Central Planning Office has made an important contribution to the coordination of Qatar's major transport infrastructure programmes. We continue to work on a significant framework to upgrade Doha's roads and drainage system.

Aside from our metro work in KSA, we are successfully supporting strategic programmes that are driving the Kingdom's long-term economic growth and diversification, including our partnership with Bechtel to advise the Economic Cities Authority on the development of four new cities.

Our Faithful+Gould business had a good first half with growth across the UAE, KSA and Qatar. Across the region we saw further contract successes, particularly in property and hospitality. For example, we have been appointed as a project manager on a new mixed use development in Riyadh.

Outlook

Our order book at 30 September 2015 represented 92% of forecast revenue for the year (2014: 97%). Client caution regarding infrastructure and property commitments is increasing and we are closely monitoring government decision-making and cash liquidity. We continue to see long-term major project opportunities come to the market in our strategic focus areas, although we expect the awarding of contracts to remain slow throughout the second half of the year. We are exploring opportunities to increase our regional footprint.

Asia Pacific

Despite the previously highlighted slowdown in our markets in mainland China, our Asia Pacific business has reported in line with our expectations. Revenue reduced 3.4% to £51.6m (2014: £53.4m), reflecting market conditions in mainland China and Hong Kong. The region's operating margin was stable at 6.6% (2014: 6.6%).

Headcount fell to 1,461 (2014: 1,566), a decrease of 6.7%, as we respond to evolving market conditions particularly in mainland China.

In Hong Kong, the largest part of our Asia Pacific business, we continue to diversify our client portfolio and to bid for major new government contracts, and our pipeline of work in the second half remains healthy. Our project management role for key elements of the West Kowloon Cultural Development is progressing well and we have started deploying resident site staff to supervise construction of the M+ Museum. We are also providing full scope architectural design for a new high profile hotel at a prime location, while Faithful+Gould is providing project management services to the same client, demonstrating the strength and success of our cross-functional, multidisciplinary offering.

In mainland China, the property market slowdown has continued with focus moving from iconic architecture to well designed, mixed-use facilities, leading to more local competition. In response to this, we are exploring opportunities for our property team to work together with local design companies. The introduction by the government of a programme of anti-corruption measures continues to slow down the release and award of major projects which is impacting our workloads.

Our strategy of geographic diversification continues and we have recently established an architecture practice in Singapore. We are making good progress in developing our relationships with outbound Chinese contractors and are starting to work with them on a number of new opportunities in Asia, Africa and the Middle East.

In southeast Asia, following our success in designing the tallest building in Vietnam, the 460-metre Vincom Landmark 81, we have secured two new significant city development contracts with Vingroup. Our relationship with Sands Corporation has been strengthened through collaboration on projects in Macau and we have been appointed as lead consultant for projects at Marina Bay Sands in Singapore. In India, we continue to see opportunities in the property, masterplanning and transportation sectors and to work with our team in Hong Kong to target opportunities in the property market.

Our Faithful+Gould business continues to perform well, with the extension last year of its role as engineering project manager on the Formula 1 Singapore Grand Prix and a strong pharmaceutical sector workload. While economic growth has slowed in China and India, we continue to see opportunities in the manufacturing and hospitality sectors.

Outlook

We have secured work in hand at 30 September 2015 of 84% (2014: 92%) of our forecast revenue. The political situation in Hong Kong has stabilised and we continue to monitor the impact of delayed approval of funding on our pipeline of work. The outlook remains stable for the rest of the year.

Energy

Our Energy business has had a difficult first half, with a good performance in our nuclear, power and renewables businesses but challenges in some of our oil and gas markets. Revenue improved significantly to £97.8m (2014: £81.3m) due in part to the benefit in the second half of last year of two acquisitions, Nuclear Safety Associates and Houston Offshore Engineering, which are now fully integrated. Organic revenue, excluding these acquisitions grew by around 4%. Margins reduced to 7.3% (2014: 10.0%), reflecting pricing pressure and the impact of the deferral and cancellation of some projects in the oil and gas market and the short-term impact on productivity as we sought to redeploy affected staff across the business.

Headcount increased to 1,887 (2014: 1,616), up 16.8%, reflecting the two acquisitions and organic growth in our nuclear, power and Middle East oil and gas businesses. 

In the UK, our position in the nuclear new build market remains strong and we welcomed EDF Energy's announcement concerning the future of Hinkley Point C. Our expertise in decommissioning continues to be in demand on projects such as the First Generation Magnox Storage Pond. We were disappointed that, following a new scientific discovery, Sellafield made the decision not to continue with the Silos Direct-encapsulation Plant project that we were awarded in December 2014 as part of the a.m.a. joint venture with AREVA and Mace. We are negotiating an appropriate demobilisation. We see significant opportunities in North America and other markets outside the UK and continue to expand the international portfolio of our nuclear business. We provide a broad range of services to the Emirates Nuclear Energy Corporation in the Middle East on the £20bn Barakah New Nuclear Programme and to the €15bn International Thermonuclear Experimental Reactor programme in the south of France.

The challenging conditions in the UK and North America oil and gas market continued in the period. In line with the industry as a whole, we remain cautious and continue to monitor productivity closely. Our oil and gas business in the Middle East has grown beyond our expectations delivering design services for Qatar Petroleum and a steady stream of smaller design and consultancy projects for the ADNOC group.

We continue to expand our portfolio of work in the international liquefied natural gas (LNG) market. Building on our ongoing relationship with Shell, we were recently appointed to develop asset integrity models for future inspection and maintenance of its Prelude FLNG project, the largest floating LNG project in the world.

In the power and renewables sector, we have further strengthened our position in the UK offshore wind market. We have recently been appointed by Seaway Heavy Lifting to design the jacket foundations for the 664MW Beatrice offshore wind farm.

Outlook

The outlook for our Energy business remains good, with the fundamental drivers for growth unchanged as the world's requirement for energy continues to increase. The first half has been impacted by the difficulties in the oil and gas market, however we believe we are well positioned for the medium and longer-term. We will adapt to a more cost conscious oil and gas market where our high end skills continue to be valued. We see significant opportunity for growth in nuclear across new build, maintenance and decommissioning and, in addition, in the renewables sector.

We continue to seek ways to grow the business organically, while also exploring further acquisition opportunities. Work in hand at 30 September 2015 was 83% (2014: 80%) of forecast revenue for the year.

FINANCE REVIEW

Revenue and operating profit performance for the six months to 30 September 2015 is discussed in more detail in the preceding Business Review.

Results

The Group has delivered good results for the six months to 30 September 2015, reporting underlying operating profit of £59.0m (2014: £53.0m), up 11.3% year on year. Underlying operating profit is arrived at after adjusting for amortisation of acquired intangibles of £3.9m (2014: £1.2m), deferred acquisition payments of £1.6m (2014: £nil), exceptional property disposal profit of £6.5m (2014: £nil) and also in 2014 for the impairment of goodwill of £2.8m and exceptional external fees of £4.4m in relation to an unsuccessful acquisition pursuit.

Profit before tax was £53.8m (2014: £39.0m) and on an underlying basis, after adjusting for the items mentioned above and additionally the loss on disposal of business of £3.0m (2014: profit of £0.5m), gives an underlying profit before tax of £55.8m (2014: 46.9).

Pensions

Pension costs

The cost of the Group's defined benefit pension schemes for the six months to 30 September 2015 amounted to £6.0m (2014: £7.9m), of which net finance costs represented £4.8m (2014: £6.8m).

Funding

The Group completed its last triennial valuation as at 31 March 2013. Under the associated recovery plan the Group agreed to contribute £32.8m to the Atkins Pension Plan (the Plan) for the year ending 31 March 2016, with annual contributions then escalating by 2.5% each year until 31 March 2025.

The Plan is closed to the future accrual of benefits and all defined benefit members of the Plan were transferred to a defined contribution section for future service where it was clear they did not benefit from a statutory or contractual right to a final salary pension.

IAS 19

The net post-tax retirement benefit liabilities of the Group's pension schemes are estimated at £214.8m (30 September 2014: £234.9m; 31 March 2015: £237.8m). A discount rate of 3.9% has been applied to the liabilities at 30 September 2015, increased from 3.5% at the year end.

The key assumptions used in the IAS 19 valuation are detailed in note 18 to the condensed consolidated interim financial information.

Income tax

The Group's income tax expense for the six months ended 30 September 2015 was £10.7m (2014: £7.8m) giving an effective tax rate of 19.9% (2014: 20.0%). The Group's effective underlying tax rate of 23.0% (2014: 19.0%) is different from the Group's effective tax rate due to the tax impact of acquisition intangibles amortisation, profits/losses on disposal of assets and exceptional external fees in the prior year. The underlying effective tax rate is higher than the standard corporation tax rate in the UK of 20% (2014: 21%) primarily due to the geographic mix of the Group's profit.

Earnings per share (EPS)

Diluted EPS increased 38.8% to 42.9p (2014: 30.9p), which is in line with the Group's profit after tax increase of 38.1%. Underlying diluted EPS rose 13.5% to 42.8p (2014: 37.7p).

Basic EPS from continuing operations for the period was 44.1p (2014: 31.8p).

Net funds

Net funds are analysed as follows:

In addition to the above net funds, the Group has £141.2m of undrawn committed borrowing facilities available (see note 17).

The Group has a five year revolving credit facility which matures in January 2020. The Group also has $75m private placement debt, due for repayment on 31 May 2019.

Cash flow

Cash generated from operations was £21.8m (2014: £13.5m) and can be summarised as follows:

Risks

The Group Risk Committee, chaired by the chief executive officer, meets periodically and considers new strategic, financial and operational risks as they arise and identifies actions to mitigate those risks. The Board reviews the work undertaken by this committee. Key risks and their mitigation have not changed significantly in the period from those disclosed on pages 50 to 53 of the annual financial statements for the year ended 31 March 2015. The key risks and mitigation are summarised below:

Notwithstanding that no new key risks have been identified in the period, we continue to manage a number of potential risks and uncertainties which could have a material impact on our long-term performance. Many of these risks are common to other companies and we assess them to establish the principal risks for the Group.

Effective risk management continues to be embedded in our governance framework, which is summarised in the Corporate Governance Report on pages 72 to 79 of the annual financial statements for the year ended 31 March 2015.

Going concern

The directors are required to consider the appropriateness of the going concern assertion in the preparation of the Group's condensed consolidated interim financial information for the six months ended 30 September 2015.

The Group meets its day-to-day working capital requirements through cash generated from operations and the use of its banking facilities. The Group has delivered good results and progressed its strategic objectives. It has net funds at 30 September 2015 of £141.1m. In addition, the Group had access to undrawn committed borrowing facilities of £141.2m at 30 September 2015. In early 2015, the Group amended and extended its five year revolving credit facility which now matures in January 2020. This arrangement provides the Group with a committed credit facility of £200m and the financial capacity to support its strategy. The Group also has $75m private placement debt, due for repayment on 31 May 2019. The Group's forecasts and projections, under various scenarios, show that the Group should be able to operate within the level of these facilities.

The Group has a good level of work in hand at 30 September 2015 representing 84.3% of forecast revenue for the year (2014: 89.1%).

After making enquiries and having considered the Group's results, the strength of its balance sheet and near-term outlook, the directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. It is therefore deemed appropriate to continue to apply the going concern principle in the preparation of its condensed consolidated interim financial information for the six months ended 30 September 2015.

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 4.2.7R and DTR 4.2.8R, namely:

The directors are listed in the Annual Report for the year ended 31 March 2015. A list of current directors can be found at www.atkinsglobal.com.

By order of the Board

Richard Webster

Company Secretary

12 November 2015

Consolidated income statement for the six months ended 30 September 2015

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 2015

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

Consolidated balance sheet as at 30 September 2015

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 2015

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

Consolidated statement of changes in equity as at 30 September 2015

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

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 2015 (unaudited)

1. General information

WS Atkins plc (the Company) is a public limited company, which is listed on the London Stock Exchange and is incorporated and domiciled in England and Wales with company number 1885586.

Copies of this half year report are available from the Company's 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 12 November 2015.

This condensed consolidated interim financial information does not comprise statutory accounts within the meaning of section 434 of the Companies Act 2006. Statutory accounts for the year ended 31 March 2015 were approved by the Board of directors on 10 June 2015 and delivered to the Registrar of Companies. The report of the auditor on those accounts was unqualified, did not contain an emphasis of matter paragraph and did not contain any statement under section 498 of the Companies Act 2006.

This condensed consolidated interim financial information has been reviewed by the Group's auditor, not audited. The review report is included.

2. Basis of preparation

This condensed consolidated interim financial information for the six months ended 30 September 2015 has been prepared in accordance with the Disclosure and Transparency Rules of the Financial Conduct Authority (previously 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 2015, which have been prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union.

Going concern basis

The directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future and therefore continue to adopt the going concern basis in preparing this condensed consolidated interim financial information.

3. Accounting policies

The accounting policies adopted are consistent with those of the consolidated Financial Statements for the year ended 31 March 2015, as described in those annual Financial Statements, except as described below.

Sale and leaseback transactions

A sale and leaseback transaction occurs when the Group sells an asset and reacquires the use of the asset by entering into a lease with the buyer. The accounting treatment of the sale and leaseback depends upon the substance of the transaction, whether or not the sale was made at the asset's fair value, and the relationship with the buyer. For sale and operating leasebacks, the assets are sold at fair value and accordingly the profit or loss from the sale is recognised immediately in the Group's income statement. The operating lease payments are recognised in accordance with the accounting policy for leases, as disclosed in the consolidated Financial Statements for the year ended 31 March 2015.

There are no new IFRSs or IFRICs that are effective for the first time for this interim period that would be expected to have a material impact on the Group.

4. Estimates

The preparation of interim financial information requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.

In preparing this condensed consolidated interim financial information, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated Financial Statements for the year ended 31 March 2015.

The accounting areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to this condensed consolidated interim financial information are in relation to contract accounting, goodwill impairment, defined benefit pension schemes, tax, research and development and joint arrangements.

Taxes on income for the six months ended 30 September 2015 are accrued using the estimated underlying tax rate that is expected to apply for the year as a whole, as adjusted for material non-underlying items arising in the six month period.

5. Segmental information

The chief operating decision maker has been identified as the chief executive officer and the Group finance director. The chief executive officer 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 Group's operating segments for management purposes predominantly reflect its key geographical markets. The segments are: United Kingdom and Europe (UK and Europe), North America, Middle East, Asia Pacific and Energy. Details of the business activities and the economic environment in which each segment operates are given in the Business Review.

The chief executive officer 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 officer and the Group finance director is measured in a manner consistent with that in the condensed consolidated interim financial information.