23rd Nov 2006 07:01
Atkins (WS) PLC23 November 2006 Thursday 23 November 2006: For Immediate Release Interim results for the six months ended 30 September 2006 Professional services group WS Atkins plc (Atkins) today announced preliminaryunaudited results for the six months ended 30 September 2006. FINANCIAL SUMMARY Six months to Six months to 30 September 30 September 2006 2005 Revenue £605.5m £516.1mOperating profit £29.9m £25.9mOperating margin 4.9% 5.0%Profit before taxation £30.9m £28.2mProfit after taxation £22.0m £21.2mFully diluted earnings per share 21.5p 21.0pStaff numbers(1) 15,922 14,424Dividend(2) 6.0p 4.5pCash (used in)/generated from operations £(7.3)m £29.3mNet funds £135.6m £127.2m------------------------ ------------ ------------ Highlights • Revenue up 17% to £605.5m. • Operating margins on a comparable basis improved to 5.3%(3) from 5.0%. • Profit before tax from continuing operations and continuing Joint Ventures (excluding the results of the Metronet Enterprise) up 18% to £31.3m. • Staff numbers up by over 1,000 since 31 March 2006. • Substantial growth in the Middle East including the establishment of a rail business in the region; continued recovery in the UK rail market and significant organic growth in Design and Engineering Solutions. • Work in hand strong with 88% of full year forecast revenue secured (2005: 87%). • Metronet Enterprise results impacted by operational issues and continued delays in the stations capital programme. Conclusions of Arbiter's report were as expected, and we are working with all of Metronet's stakeholders to enable Metronet to become economic and efficient overall. • Net funds have reduced by £41.0m from 31 March 2006 which is primarily the result of the normal seasonality of cash flows, further pension payments, growth in the business and acquisitions. • Interim dividend up 33% to 6.0p per share. Notes: 1. Staff numbers are shown on a full time equivalent basis. 2. Interim dividend proposed for six months to 30 September. 3. Comparable operating margin restates the 2006 margins to a comparable basis to 2005 figures in respect of IAS 19 pension costs. Commenting on the results, Keith Clarke, Chief Executive of Atkins, said: "The Group's wholly owned operations have had a good start to the year withprofit before tax from continuing operations and continuing Joint Venturesexcluding the Metronet Enterprise up by 18%. Revenue has grown by 17% to £605.5mdriven by substantial growth in the Middle East following the establishment of arail business in the region; strong organic growth in Design and EngineeringSolutions and the continued recovery in the UK rail market, where we have won anumber of significant signalling contracts. Much of this growth has been driven by a significant increase in headcount, withstaff numbers up by more than 1,000 in the first six months of this financialyear. This headcount increase has been across the Group, but particularly in theMiddle East, as we continue to develop our strong multi-national presence. The Metronet Enterprise continues to impact the Group's results and hascontributed a £1.4m reduction in profit before tax compared to the same periodlast year. The conclusion in the Arbiter's recent report that Metronet was not performingin an economic and efficient manner, was as expected. Whilst some improvementshave been made, much still remains to be done to enable Metronet to achieve itsgoal of being economic and efficient overall at the end of the first reviewperiod in September 2010. The markets in which we operate continue to provide good prospects and we areconfident that our wholly owned operations will continue to grow. Our work inhand remains strong with 88% of forecast year end revenue secured (2005: 87%). The recovery in the performance of the Metronet Enterprise remains crucial toits eventual success and the realisation of Atkins' returns. We are working withall of Metronet's stakeholders to review the current arrangements to improve theefficiency and effectiveness of delivery." Enquiries AtkinsKeith Clarke, Chief Executive + 44 (0) 1372 726140Robert MacLeod, Group Finance Director + 44 (0) 1372 726140James Garthwaite, Group Communications Director + 44 (0) 1372 726140BrunswickNick Claydon, Jonathan Rhodes +44 (0) 20 7404 5959 Notes to Editors 1. Atkins Atkins (www.atkinsglobal.com) plans, designs and enables the delivery of complexinfrastructure and buildings for clients in the public and private sectorsacross the world. Atkins is the largest multi-disciplinary consultancy inEurope; the largest engineering consultancy in the UK; and the third largestdesign firm in the world (sources: New Civil Engineer Consultants File, 2006;Swedish Federation of Consultant Engineers & Architects, 2005; Engineering NewsRecord, 2006). 2. Attachments Attached to this press release are the Overview of the period, Business review,Finance review, the unaudited consolidated income statement, consolidatedbalance sheet, consolidated statement of recognised income and expense,consolidated cash flow statement and notes to the financial information for theperiod. 3. Analyst Presentation A presentation for analysts will be held today at The Lincoln Centre, 18Lincoln's Inn Fields, WC2A 3ED, at 9.00am. A webcast of the presentation willsubsequently be available via the Company's website, www.atkinsglobal.com. OVERVIEW Results The Group's wholly owned operations have had a good start to the year withprofit before tax from continuing operations and continuing Joint Venturesexcluding the Metronet Enterprise up by 18%. Revenue has grown by 17% to £605.5mdriven by substantial growth in the Middle East following the establishment of arail business in the region; strong organic growth in Design and EngineeringSolutions and the continued recovery in the UK rail market, where we have won anumber of significant signalling contracts. Much of this growth has been driven by a substantial increase in headcount, withstaff numbers up by more than 1,000 in the first six months of this financialyear. This headcount increase was across the Group, but particularly in theMiddle East, as we continue to develop our strong multi-national presence. The current service cost of defined benefit pension schemes has increased by£2.3m due to a reduction in discount rates compared to 1 April 2005, althoughthe total pension charge including net finance costs remains unchanged at£12.5m. This change reduces the Group's operating margins by 0.4% but has noimpact upon the Group's overall profitability. On a comparable basis, operatingmargins have increased to 5.3% from 5.0%. The Metronet Enterprise continues to impact the Group's results and hascontributed a £1.4m reduction in profit before tax compared to the same periodlast year. The conclusion in the Arbiter's recent report that Metronet was not performingin an economic and efficient manner, was as expected. Whilst some improvementshave been made, much still remains to be done to enable Metronet to achieve itsgoal of being economic and efficient overall at the end of the first reviewperiod in September 2010. Outlook The markets in which we operate continue to provide good prospects and we areconfident that our wholly owned operations will continue to grow. Our work inhand remains strong with 88% of forecast year end revenue secured (2005: 87%). The recovery in the performance of the Metronet Enterprise remains crucial toits eventual success and the realisation of Atkins' returns. We are working withall of Metronet's stakeholders to review the current arrangements to improve theefficiency and effectiveness of delivery overall. Board of Directors On 6 September 2006, Christopher Kemball informed the Board that he will stepdown as a Director on 31 December 2006. We would like to thank him for hisvaluable contribution to the Group over the last four years. Dividend In view of the Board's continuing confidence in the Group's outlook, and torestore the historic relationship between the level of interim and finaldividends, an interim dividend of 6.0p per share will be paid on 26 January 2007to all shareholders on the register on 15 December 2006 (2005 interim dividend:4.5p per share). BUSINESS REVIEW Design and Engineering Solutions Six months to Six months to 30 September 30 September 2006 2005 Revenue £164.5m £137.5mOperating profit £12.0m £10.9mOperating margin 7.3% 7.9%Comparable operating margin 7.8% 7.9%Work in hand 87% 81%Staff at 30 September 4,269 3,778 Design and Engineering Solutions produced a strong first half performance withrevenue up by 20% and growth in staff numbers of 13%. The growth generated anincrease in operating profit of £1.1m (10%) although operating margins fellslightly. This fall is primarily due to increased pension service costs as thecomparable operating margin was broadly the same as last year at 7.8% (2005:7.9%). Design and Engineering Solutions is operating in good markets. In particular: • We continue to grow our design and architecture skills working for a range of UK public and private sector clients. In addition, we have had success in winning a number of concept design engagements in overseas markets. • Infrastructure design work on the water companies' current capital programmes is increasing and we have recently won a nine-year framework contract with Southern Water to provide strategic asset management and engineering services. • Our operations for clients in the UK energy market continue to grow and we have deepened our relationships with key clients such as British Energy and National Grid. • We continue to make progress in the nuclear decommissioning market. • We have built a strong Defence Systems operation aided by our work on the Future Rapid Effects System (FRES) project and are well placed to secure work in future phases. • Following the acquisition of MSL Engineering, which contributed revenue of approximately £3.0m in the first six months of the financial year, we are now able to offer our Oil & Gas clients an improved range of services. • Our relationship with Airbus remains strong and our work extends beyond the A380 programme and includes work undertaken on the A350 and A400M. Outlook The outlook for the Design and Engineering Solutions segment remains good. Therecruitment and retention of staff remains a key priority and we continue toincrease our overseas recruitment activity. Following the acquisition of MSL, wecontinue to review selective acquisitions to strengthen our offering in thosemarkets that offer the greatest potential. Highways and Transportation Six months to Six months to 30 September 30 September 2006 2005 Revenue £119.6m £111.7mOperating profit £4.0m £5.2mOperating margin 3.3% 4.7%Comparable operating margin 3.8% 4.7%Work in hand 92% 87%Staff at 30 September 3,076 2,869 During the period, revenues grew by 7% compared with the same period last yearprincipally as a result of the mobilisation of the Gloucestershire CountyCouncil (GCC) contract. This five-year contract, extendable to 10 years, isexpected to deliver annual revenues of around £30m. Operating profit in theperiod was down by £1.2m compared with last year primarily due to the set upcosts of the GCC contract, a relatively slow start to the year in our planningand design businesses and the impact of higher pension service costs. Thecomparable operating margin was 3.8% (2005: 4.7%). On 1 September 2006 we commenced service delivery on a 10-year £250m integratedcontract to provide transport consultancy and highways management services forCambridgeshire County Council. There continues to be demand for our major projects design teams in the UK andwe are bidding on a number of major UK highway projects. Work is now flowingsteadily through a number of recently secured, strategically importantframeworks such as the four-year Highways Agency project support contract. OurTransport Planning business has invested in significant tendering activity andprovided support to a number of Local Authorities bidding for TransportInnovation Funding. Outlook The outlook for our Highways and Transportation segment remains in line with ourexpectations. The second half of this year will benefit from the commencement ofthe Cambridgeshire contract and an increased contribution from theGloucestershire contract. Rail Six months to Six months to 30 September 30 September 2006 2005 Revenue £112.7m £87.8mOperating profit £1.5m £1.1mOperating margin 1.3% 1.3%Comparable operating margin 1.9% 1.3%Work in hand 89% 98%Staff at 30 September 1,890 1,866 Our Network Rail related activities have continued to recover from the recentpoor market conditions with work on our major re-signalling contracts at PortTalbot and Basingstoke contributing to the significant increase in revenuecompared with last year. The operating performance of the UK rail business inthe first half of this year has improved and the order book has strengthenedwith a number of major wins including Crossrail, Rugby re-signalling and theCardiff and Newport re-signalling frameworks. Secured work now represents 89% offull year forecast revenue. The results in the first half were, however,affected by losses on two EU funded feasibility study projects for the Polishstate railway and the impact of higher pension service costs. The comparableoperating margin was 1.9% (2005: 1.3%). During the period, our work on the Metronet stations programme generated noprofit against a loss for the same period last year. A small profit was made onsome staff seconded to the Joint Venture. Outlook Our Rail segment continues to recover. The expenditure plans of Network Railindicate a healthy ongoing level of infrastructure investment which, combinedwith the emerging Passenger Transport Executive market, represents significantpotential for growth. Middle East and China Six months to Six months to 30 September 30 September 2006 2005 Revenue £53.6m £30.5mOperating profit £3.2m £1.5mOperating margin 6.0% 4.9%Work in hand 87% 96%Staff at 30 September 2,377 1,571 Driven by its excellent reputation in the region, our Middle East business hascontinued its considerable growth, which is underpinned by a buoyant market andthe establishment of a new rail business in Dubai. Operating profits increasedsignificantly and we now employ around 1,500 staff in the Middle East, up from1,000 six months ago. Our reputation in the region and diverse skills gives usaccess to a large number of opportunities. The most significant new project is the Dubai Metro light rail scheme for whichAtkins is acting as lead consultant for the Japanese-Turkish Metro Joint Venturefor all works comprising the Red Line. Our design and programme management workincludes 26 stations (four underground), 53km of viaducts and tunnelling and allassociated infrastructure and building works. This project utilises Atkins' corestrengths and uses skills from across the Group. Our Chinese business has made steady progress and is now trading profitably.Staff numbers have grown to 650 up from 550 at the year end, with a further 230site-based. Our focus in China continues to be on urban planning andarchitectural design. Outlook The outlook for this segment is good and secured work represents 87% of fullyear forecast revenue. In the Middle East our wider offering now includes thenew rail business and places us in a strong position to capitalise on thisgrowing market. In China we continue to focus on secondary and tertiary citieswhich are attracting increasing amounts of investment. Management and Project Services Six months to Six months to 30 September 30 September 2006 2005 Revenue £93.6m £83.5mOperating profit £5.6m £5.7mOperating margin 6.0% 6.8%Comparable operating margin 6.1% 6.8%Work in hand 85% 82%Staff at 30 September 2,226 2,026 Faithful+Gould has benefited from an improved performance in the USA. Thepharmaceutical, oil and gas and property markets especially have contributed tothe first six months of the year, whilst trading in the UK remains satisfactory. During the period Management Consultants commenced its new five-year frameworkcontract providing programme and business process management to the GovernmentCommunications Headquarters (GCHQ). The DfES has awarded us two furthercontracts worth £11m over the next three years. The Management Consultants business is implementing an organisational change toposition it for future growth and Mantix, which was acquired in June 2006, isbeing incorporated into the new structure. The integration costs associated withthe acquisition have had an impact on the results in the first half of the year. Outlook Prospects for the Management and Project Services segment remain positive.Following the acquisition of Mantix, the Management Consultants business ispositioned to win further work in an increasingly competitive market and themarkets in the UK and USA give Faithful+Gould good opportunities to grow. Asset Management Six months to Six months to 30 September 30 September 2006 2005 Revenue £24.6m £30.9mOperating profit £0.6m £0.2mOperating margin 2.4% 0.6%Comparable operating margin 2.8% 0.6%Work in hand 93% 83%Staff at 30 September 662 915 Our Asset Management business performed in line with expectations benefitingfrom contract wins with HBOS and the Metropolitan Police where we are acting asmanaging agents for facilities management services. We have also extended oureight year association with Barclays Bank Plc through the award of a newfive-year commission and started service delivery to the new facility atColchester Garrison. Revenue fell compared with last year as the previous localMoD Defence Estates contracts have been replaced by the new Defence HousingPrime Contract, which is carried out through a joint venture company in which wehave a 25% stake. Outlook Asset Management continues to be a niche business with opportunities in thefinancial services and public sectors. Equity Investments Six months to Six months to 30 September 30 September 2006 2005 Revenue £36.9m £34.2mOperating profit £3.0m £1.3mOperating margin 8.1% 3.8%Staff at 30 September 919 875 The results of the Equity Investments Segment relate largely to Lambert SmithHampton (LSH), the Group's commercial property business. LSH has continued tomake progress building upon the results of the previous year. The results of this segment also benefited from payments relating to completionof phase one of the Colchester Garrison project. Outlook LSH is well placed to benefit from positive market conditions with propertyinvestment demand expected to remain strong in the near term. Metronet The day-to-day operational performance of the lines for which Metronet isresponsible has been below expectations in the first half of the year. Metronethas incurred financial penalties and additional costs relating to trackmaintenance and signalling issues on the sub surface lines in early summer.These have impacted Metronet's financial results in the first half of the year. The stations modernisation programme remains a cause for concern with only twofurther stations being completed and accepted back into service over the pastsix months. This has continued to impact the Group's profitability. The PPP Arbiter last week issued his first annual guidance report on Metronet'sperformance. The report covers the period from 3 April 2003 to 31 March 2006.The Arbiter's conclusions are broadly in line with our own assessment. Theintention of the annual review process was to provide a non-binding report whichprovides useful guidance on the areas of improvement necessary in order toachieve the goal of Metronet being economic and efficient at the end of thefirst review period in September 2010. Metronet was already addressing many ofthe issues raised by the Arbiter and is working with all of its supply chain,including that element contracted to its shareholders, and London Underground toensure that Metronet will be economic and efficient overall. Atkins continues to support Metronet through the secondment of a number of oursenior staff into Metronet and Trans4m. The group currently has approximately750 people (600 at March 2006) working on this project. The table below summarises the Group's financial results relating to its entireinvolvement in the PPP project. It comprises the Group's share of the results ofthe Metronet and Trans4m Joint Ventures together with the operating results ofthe Atkins supply chain and is collectively referred to as the 'MetronetEnterprise'. Six months to Six months to 30 September 2006 30 September 2005 £m £mMetronet PPP - share of profit after tax - 2.3Costs of letters of credit (0.7) (1.0) (0.7) 1.3Supply chain (0.6) -Trans4m - share of loss after taxBusiness Segments 0.9 (0.3)Metronet Enterprise (0.4) 1.0 Outlook The recovery of the efficiency of the capital programme together with thestabilisation and continued improvement of the day-to-day operationalperformance remains crucial to the eventual success of the Metronet Enterpriseand the realisation of Atkins' returns. Whilst some progress is being made it isessential that Metronet performs in an economic and efficient manner. Metronet,in consultation with all of its stakeholders, including Atkins and LondonUnderground, is working to ensure that this is achieved. FINANCE REVIEW Income statement The results for the six months to 30 September 2006 are summarised below. Six months to Six months to 30 September 30 September 2006 2005 £m £mGroup profit before tax 31.2 24.0Joint Venture (loss)/profitbefore tax (0.4) 6.2Profit before tax (before JV tax) 30.8 30.2Joint Venture tax 0.1 (2.0)Profit before tax 30.9 28.2Taxation (8.9) (7.0)Profit for the period 22.0 21.2 Taxation The Group's underlying tax rate for the period (including the tax on the Group'sJoint Ventures) was 28.6% compared to 29.8% for the six months ended 30September 2005. The reduction in the Group's underlying tax rate is mainly dueto the increased proportion of profits earned in lower tax overseas territories. Pensions Pension Costs The cost of the Group's defined benefit pension schemes for the six months to30 September 2006 of £12.5m is the same as last year. The current service costhas increased by £2.3m due to a reduction in the discount rate used, however,this has been offset by an equal reduction in net finance costs. This changereduces the Group's operating margins by 0.4% but has no impact upon the Group'soverall profitability. The comparable operating margin restates 2006 margins inrespect of the IAS 19 discount rate to achieve consistency with the rate used in2005. Funding The Group continued to pay accelerated contributions into the Atkins PensionPlan (six months to 30 September 2006: £12.5m; six months to 30 September 2005:£5.0m). Although the next formal actuarial valuation will take place as at 1April 2007, an estimated actuarial valuation indicated that the deficit hadincreased from £69m at 1 April 2004 to approximately £180m at 30 June 2006. TheGroup has commenced discussions with the Trustees of the Atkins Pension Plan toagree ways to limit any further increases in the Group's defined benefitliabilities, other than for protected schemes. IAS 19 Under IAS 19, Employee Benefits, the Group recognised a post tax retirementbenefit liability of £219.1m at 30 September 2006 (2005: £202.1m). For the sixmonths to 30 September 2006 the Group posted a post tax actuarial loss of £15.4mthrough equity (2005: £10.7m). The key assumptions and sensitivities used in the IAS 19 valuation are detailedin note 11 to this interim financial information. Earnings per share (EPS) Basic EPS for the period was 21.9p (six months to September 2005: 21.3p). Fullydiluted EPS was 21.5p (2005: 21.0p). Cash flow Net funds reduced by £41.0m from the start of the financial year to £135.6m at30 September 2006. A reconciliation between profit for the period and cashgenerated from continuing operations is shown in note 9 to this financialinformation. The cash used in operations was £7.3m compared with a cashgeneration of £29.3m in the same period last year. This reversal was anticipatedand included the effects of the normal seasonality of cash flows, a slightworsening of the Group's working capital position, growth in the business andthe further cash contributions to the Atkins Pension Plan referred to above. Afurther £8.9m was spent on acquisitions in the period, principally theacquisition of Mantix Group Limited. Consolidated income statement for the six months ended 30 September 2006(unaudited) --------------------- ------ ----------- ---------- --------- Notes Six months to Six months to Year to 30 September 30 September 31 March 2006 2006 2005 £m £m £m--------------------- ------ ----------- ---------- ---------Continuing operationsRevenue (Group andshare of JointVentures) 792.3 676.7 1,411.0--------------------- ------ ----------- ---------- ---------Revenue 2 605.5 516.1 1,052.5Cost of sales (389.1) (321.2) (637.3)--------------------- ------ ----------- ---------- --------- Gross profit 216.4 194.9 415.2Administrative expenses (186.5) (169.0) (352.3)--------------------- ------ ----------- ---------- ---------Operating profit 2 29.9 25.9 62.9 Profit on disposalof Joint Ventures - - 6.4Share of post-tax(losses)/profitfrom Joint Ventures 3 (0.3) 4.2 8.8--------------------- ------ ----------- ---------- ---------Profit from operations 29.6 30.1 78.1 Finance income 4 4.5 4.0 7.9Finance cost 4 (3.2) (5.9) (11.2)--------------------- ------ ----------- ---------- ---------Net financeincome/(cost) 4 1.3 (1.9) (3.3)--------------------- ------ ----------- ---------- ---------Profit before taxation 30.9 28.2 74.8 Taxation 5 (8.9) (7.0) (17.9) --------------------- ------ ----------- ---------- ---------Profit for theperiod attributableto equityshareholders 22.0 21.2 56.9--------------------- ------ ----------- ---------- --------- Basic earnings pershare - continuingoperations 6 21.9p 21.3p 57.0pFully dilutedearnings per share- continuingoperations 6 21.5p 21.0p 55.9pDividendsrecognised in theperiod - paid 7 11.5p 8.0p 12.5pDividends relatingto the period -proposed 7 6.0p 4.5p 16.0p--------------------- ------ ----------- ---------- --------- The notes on pages 12 to 17 form part of the interim financial information. Consolidated balance sheet as at 30 September 2006 (unaudited) --------------------- ------ ----------- ---------- --------- Notes 30 September 30 September 31 March 2006 2006 2005 £m £m £m--------------------- ------ ----------- ---------- ---------AssetsNon-current assetsGoodwill 43.1 29.7 35.6Other intangibleassets 10.7 11.5 10.0Property, plant andequipment 47.9 35.4 47.2Investments inJoint Ventures 54.9 35.8 46.2Financial assets 20.1 20.1 20.1Deferred taxassets 109.1 101.8 103.8Trade and otherreceivables 0.5 2.0 1.5--------------------- ------ ----------- ---------- --------- 286.3 236.3 264.4--------------------- ------ ----------- ---------- --------- Current assetsInventories 0.4 0.3 0.2Trade and otherreceivables 277.3 230.1 272.9Assets heldfor sale - 2.0 -Financial assets 27.1 24.9 20.7Cash and cashequivalents 10 120.4 120.1 177.4--------------------- ------ ----------- ---------- --------- 425.2 377.4 471.2--------------------- ------ ----------- ---------- --------- LiabilitiesCurrent liabilitiesBorrowings (3.8) (2.7) (6.5)Trade andother payables (344.6) (291.2) (379.5)Current taxliabilities (20.2) (14.7) (12.3)Provisions forliabilitiesand charges (2.5) (2.6) (2.8)--------------------- ------ ----------- ---------- --------- (371.1) (311.2) (401.1)--------------------- ------ ----------- ---------- ---------Net current assets 54.1 66.2 70.1--------------------- ------ ----------- ---------- --------- Non-current liabilitiesBorrowings (28.2) (35.2) (35.1)Provisions forliabilitiesand charges (10.5) (12.1) (11.7)Retirement benefitliabilities 11 (313.0) (288.7) (299.9)Other non-currentliabilities (23.7) (24.7) (23.9)--------------------- ------ ----------- ---------- --------- (375.4) (360.7) (370.6)--------------------- ------ ----------- ---------- ------------------------------ ------ ----------- ---------- ---------Net liabilities (35.0) (58.2) (36.1)--------------------- ------ ----------- ---------- --------- Capital and reservesOrdinary shares 8 0.5 0.5 0.5Share premiumaccount 8 62.4 62.4 62.4Merger reserve 8 8.9 8.9 8.9Retained loss 8 (106.8) (130.0) (107.9)--------------------- ------ ----------- ---------- ---------Equity shareholders'deficit (35.0) (58.2) (36.1)--------------------- ------ ----------- ---------- --------- The notes on pages 12 to 17 form part of the interim financial information. Consolidated statement of recognised income and expense for the six months ended30 September 2006 (unaudited) ---------------------- ------ ----------- ---------- --------- Notes Six months to Six months to Year to 30 September 30 September 31 March 2006 2005 2006 £m £m £m---------------------- ------ ----------- ---------- --------- Actuarial loss onretirement benefitliabilities 11 (22.0) (15.3) (37.7)Share of JointVenture financialderivatives 4.0 (3.4) (0.5)Tax on itemscharged to equity 6.6 4.6 11.3Net differences onexchange (0.4) 0.3 1.5---------------------- ------ ----------- ---------- --------- (11.8) (13.8) (25.4)Profit for the period 22.0 21.2 56.9---------------------- ------ ----------- ---------- ---------Total recognisedincome & expensefor the yearattributable toequity shareholders 10.2 7.4 31.5---------------------- ------ ----------- ---------- --------- Consolidated cash flow statement for the six months ended 30 September 2006(unaudited) Notes Six months to Six months to Year to 30 September 30 September 31 March 2006 2006 2005 £m £m £mCash flows from operatingactivitiesCash (used in)/generated from operations 9 (7.3) 29.3 111.7Interest received 4.5 3.7 7.6Interest paid (1.0) (1.3) (2.4)Tax received/(paid) 0.1 (2.5) (10.9)--------------------- ------ ----------- ---------- ---------Nat cash from operatingactivities (3.7) 29.2 106.0--------------------- ------ ----------- ---------- --------- Cash flows from investingactivitiesDividends receivedfrom Joint Ventures 0.2 2.6 3.7Investment in Metronet (5.3) (5.6) (11.2)Acquisition ofsubsidiaries 12 - Consideration (11.4) - (4.9) - Cash acquired 2.5 - (0.2)Purchases ofproperty, plant andequipment (8.6) (6.0) (20.4)Proceeds from disposal ofproperty, plant andequipment 0.3 0.3 0.5Proceeds from disposal of Joint Ventures - - 9.2Financial assets (6.4) (13.7) (9.6)Purchases of otherintangible assets (5.1) (4.3) (8.3)--------------------- ------ ----------- ---------- ---------Net cash used ininvesting activities (33.8) (26.7) (41.2)--------------------- ------ ----------- ---------- --------- Cash flows from financingactivitiesRepayment ofshort-term loans (2.7) - -Long-term loans - 11.7 12.5Repayment oflong-term loans (1.4) - (1.1)Finance leaseprincipal payments (1.9) (1.2) (3.2)Sales of own shares by Employee Benefit Trusts 0.1 0.1 1.3Equity dividends paid toshareholders (11.1) (7.8) (12.4)--------------------- ------ ----------- ---------- ---------Net cash (used in)/generated from financingactivities (17.0) 2.8 (2.9)--------------------- ------ ----------- ---------- ------------------------------ ------ ----------- ---------- ---------Effects of exchangerate changes (2.5) 0.2 0.9--------------------- ------ ----------- ---------- ------------------------------ ------ ----------- ---------- ---------Net (decrease)/increasein cash and cashequivalents (57.0) 5.5 62.8--------------------- ------ ----------- ---------- --------- Cash and cashequivalents atbeginning of period 177.4 114.6 114.6--------------------- ------ ----------- ---------- ---------Cash and cashequivalents at endof period 10 120.4 120.1 177.4--------------------- ------ ----------- ---------- --------- The notes on pages 12 to 17 form part of the interim financial information Notes to the financial information for the six months ended 30 September 2006(unaudited) 1. Basis of preparation This interim financial information, which is abridged, comprises the interimconsolidated balance sheets as at 30 September 2006 and 30 September 2005 andrelated consolidated interim statements of income and cash flows for six monthsended 30 September 2006 and 30 September 2005 (hereinafter referred to as'Financial Information'). All periods presented are unaudited and unreviewed.The information contained in these statements in relation to the year ended 31March 2006 does not constitute statutory accounts as defined in section 240 ofthe Companies Act 1985. A copy of the audited and unqualified statutory accountsfor that year has been delivered to the Registrar of Companies. The interimfinancial information, including all comparatives, has been prepared inaccordance with the Listing Rules of the Financial Services Authority. Comparative figures as at 30 September 2005 include a reclassification of £68.9mbetween financial assets and cash and cash equivalents to ensure that thetreatment of certain short-term liquid deposits is consistent with thatdisclosed in the audited financial statements as at 31 March 2006. Comparativefigures as at 30 September 2005 also include re-statements of £9.8m onretirement benefit liabilities, £2.9m on deferred tax assets relating toretirement benefits and £6.9m on the retained loss reserve to ensure that thetreatment of retirement benefit liabilities is consistent with that disclosed inthe audited financial statements as at 31 March 2006. The interim financial information has been prepared in accordance with theprincipal accounting policies as set out in the Group's annual financialstatements for the year ended 31 March 2006. The accounting policies have beenconsistently applied to all periods presented. The Group has elected not to adopt IAS 34, Interim financial statements and,therefore, this interim financial information is not in compliance with IFRS. 2 Segmental reporting - business segments ------------------- ------- ------- ------- ------- ------- --------Six months to 30 Total Inter- Revenue Operating Operating Share ofSeptember 2006 revenue segment £m profit margin post-tax £m revenue profit/(loss) £m from Joint Ventures £m % £m------------------- ------- ------- ------- ------- ------- --------Design andEngineeringSolutions 172.4 (7.9) 164.5 12.0 7.3% (0.1)Highways andTransportation 129.0 (9.4) 119.6 4.0 3.3% 0.3Rail 125.1 (12.4) 112.7 1.5 1.3% -Middle Eastand China 56.0 (2.4) 53.6 3.2 6.0% -Management andProject Services 98.3 (4.7) 93.6 5.6 6.0% -Asset Management 26.1 (1.5) 24.6 0.6 2.4% -Equity Investments 36.9 - 36.9 3.0 8.1% (0.5)------------------- ------- ------- ------- ------- ------- --------Total continuingsegments 643.8 (38.3) 605.5 29.9 4.9% (0.3)------------------- ------- ------- ------- ------- ------- -------- ------------------- ------- ------- ------- ------- ------- --------Six months to 30 Total Inter- Revenue Operating Operating Share ofSeptember 2005 revenue segment £m profit margin post-tax £m revenue profit/(loss) £m from Joint Ventures £m % £m------------------- ------- ------- ------- ------- ------- --------Design andEngineeringSolutions 145.0 (7.5) 137.5 10.9 7.9% (0.1)Highways andTransportation 119.4 (7.7) 111.7 5.2 4.7% 0.6Rail 94.5 (6.7) 87.8 1.1 1.3% -Middle Eastand China 30.6 (0.1) 30.5 1.5 4.9% -Management andProject Services 87.2 (3.7) 83.5 5.7 6.8% -Asset Management 31.4 (0.5) 30.9 0.2 0.6% -Equity Investments 34.3 (0.1) 34.2 1.3 3.8% 3.0------------------- ------- ------- ------- ------- ------- --------Total continuingsegments 542.4 (26.3) 516.1 25.9 5.0% 3.5------------------- ------- ------- ------- ------- ------- --------Disposed 0.7------------------- ------- ------- ------- ------- ------- --------Total 542.4 (26.3) 516.1 25.9 5.0% 4.2------------------- ------- ------- ------- ------- ------- -------- ------------------- ------- ------- ------- ------- ------- --------Year to 31 March Total Inter- Revenue Operating Operating Share of2006 revenue segment £m profit margin post-tax £m revenue profit/(loss) £m from Joint Ventures £m % £m------------------- ------- ------- ------- ------- ------- --------Design andEngineeringSolutions 303.7 (17.4) 286.3 23.4 8.2% -Highways andTransportation 231.5 (16.1) 215.4 11.0 5.1% 0.7Rail 190.6 (14.1) 176.5 2.6 1.5% -Middle Eastand China 72.8 (5.7) 67.1 3.0 4.5% -Management andProject Services 179.5 (7.6) 171.9 13.9 8.1% -Asset Management 63.0 (1.5) 61.5 4.0 6.5% -Equity Investments 74.1 (0.3) 73.8 5.0 6.8% 7.2------------------- ------- ------- ------- ------- ------- --------Total continuingsegments 1,115.2 (62.7) 1,052.5 62.9 6.0% 7.9------------------- ------- ------- ------- ------- ------- --------Disposed 0.9------------------- ------- ------- ------- ------- ------- -------- Total 1,115.2 (62.7) 1,052.5 62.9 6.0% 8.8------------------- ------- ------- ------- ------- ------- -------- 3 Share of post-tax profits/(losses) from Joint Ventures ------------------------------- ------- ------- ------- -------Six months to 30 September 2006 Metronet Other Disposed Total £m £m £m £m------------------------------- ------- ------- ------- -------Revenue 122.0 64.8 - 186.8Operating expenditure (122.2) (65.6) - (187.8)------------------------------- ------- ------- ------- -------Operating profit (0.2) (0.8) - (1.0)Finance cost (7.7) (2.2) - (9.9)Finance income 7.9 2.6 - 10.5------------------------------- ------- ------- ------- -------Profit before taxation - (0.4) - (0.4)Taxation - 0.1 - 0.1------------------------------- ------- ------- ------- -------Share of post-tax profits/(losses) fromJoint Ventures - (0.3) - (0.3)------------------------------- ------- ------- ------- ------- ------------------------------- ------- ------- ------- -------Six months to 30 September 2005 Metronet Other Disposed Total £m £m £m £m------------------------------- ------- ------- ------- -------Revenue 109.8 48.5 2.3 160.6Operating expenditure (105.7) (47.3) (1.1) (154.1)------------------------------- ------- ------- ------- -------Operating profit 4.1 1.2 1.2 6.5Finance cost (7.7) (2.1) (1.0) (10.8)Finance income 7.1 2.4 1.0 10.5------------------------------- ------- ------- ------- -------Profit before taxation 3.5 1.5 1.2 6.2Taxation (1.2) (0.3) (0.5) (2.0)------------------------------- ------- ------- ------- -------Share of post-tax profits from JointVentures 2.3 1.2 0.7 4.2------------------------------- ------- ------- ------- ------- ------------------------------- ------- ------- ------- -------Year to 31 March 2006 Metronet Other Disposed Total £m £m £m £m------------------------------- ------- ------- ------- -------Revenue 246.9 108.9 2.7 358.5Operating expenditure (235.1) (108.5) (1.5) (345.1)------------------------------- ------- ------- ------- -------Operating profit 11.8 0.4 1.2 13.4Finance cost (19.7) (4.3) (1.2) (25.2)Finance income 18.7 4.6 1.3 24.6------------------------------- ------- ------- ------- -------Profit before taxation 10.8 0.7 1.3 12.8Taxation (3.3) (0.3) (0.4) (4.0)------------------------------- ------- ------- ------- -------Share of post-tax profits from JointVentures 7.5 0.4 0.9 8.8------------------------------- ------- ------- ------- ------- 4 Net finance (income)/cost ------------------------------ --------- ---------- ---------- Six months to Six months to Year to 30 Sept 2006 30 Sept 2005 31 March 2006 £m £m £m------------------------------ --------- ---------- ----------Interest payable on borrowings 0.6 0.6 0.9Letters of credit charges 0.7 1.0 2.0Net finance cost on retirementbenefit liabilities (note 11) 1.2 3.5 6.7Other 0.7 0.8 1.6------------------------------ --------- ---------- ----------Finance cost 3.2 5.9 11.2Finance income (4.5) (4.0) (7.9)------------------------------ --------- ---------- ----------Net finance (income)/cost (1.3) 1.9 3.3------------------------------ --------- ---------- ---------- 5. Taxation a) Analysis of charge in the period --------------------------- --------- ---------- -------- Six months to Six months to Year to 30 Sept 2006 30 Sept 2005 31 March 2006 £m £m £m--------------------------- --------- ---------- --------Current taxation- UK 6.6 5.4 10.3- Overseas 1.0 0.9 2.5Deferred taxation 1.3 0.7 5.1--------------------------- --------- ---------- --------Taxation charge per incomestatement 8.9 7.0 17.9--------------------------- --------- ---------- -------- Profit before taxation perincome statement 30.9 28.2 74.8--------------------------- --------- ---------- -------- --------------------------- --------- ---------- --------Effective taxation rate 28.8% 24.8% 23.9%--------------------------- --------- ---------- -------- b) Analysis of total tax charge in the period, excluding the effect of theprofit on disposal of Joint Ventures --------------------------- --------- ---------- --------Taxation charge per income statement 8.9 7.0 17.9Adjust for:- Joint Venture taxation (0.1) 2.0 4.0- Taxation on profit on disposal of Joint Ventures - - (0.5)--------------------------- --------- ---------- -------- 8.8 9.0 21.4--------------------------- --------- ---------- -------- Profit before taxation per income statement 30.9 28.2 74.8Adjust for:- Joint Venture taxation (0.1) 2.0 4.0- Profit on disposal of Joint Ventures - - (6.4)--------------------------- --------- ---------- -------- 30.8 30.2 72.4--------------------------- --------- ---------- ----------------------------------- --------- ---------- --------Total effective taxation rate 28.6% 29.8% 29.6%--------------------------- --------- ---------- -------- c) Taxation credit on items charged to equity --------------------------- --------- ---------- --------At beginning of period 20.3 8.9 8.9Credited to equity during the period/year - 6.6 4.6 11.3retirement benefitsCredited to equity during the period/year - 0.1 0.5 0.1share based payments --------- ---------- -----------------------------------At end of period 27.0 14.0 20.3--------------------------- --------- ---------- -------- 6. Earnings per share (EPS) Basic earnings per share is calculated by dividing the earnings attributable toordinary shareholders by the weighted average number of shares in issue duringthe period excluding shares held by the Employee Benefit Trusts (EBTs) whichhave not unconditionally vested in the employees. Fully diluted earnings per share is the basic earnings per share after allowingfor the dilutive effect of the conversion into ordinary shares of the number ofoptions outstanding during the period. The options relate to the SAYE schemes,Equity Participation Plans, Long Term Incentive Plans and the Deferred BonusPlans. Reconciliations of the earnings and weighted average number of shares used inthe calculations are set out below: --------------------------------- ---------- ---------- -------- Six months to Six months to Year to 30 Sept 2006 30 Sept 2005 31 March 2006 number number number ('000) ('000) ('000)--------------------------------- ---------- ---------- --------Number of sharesWeighted average number ofshares used in basic EPS 100,665 99,448 99,790Effect of dilutive securities -Share options 1,623 1,299 2,028--------------------------------- ---------- ---------- --------Weighted average number ofshares used in fully diluted EPS 102,288 100,747 101,818--------------------------------- ---------- ---------- -------- £m £m £m--------------------------------- ---------- ---------- --------Earnings 22.0 21.2 56.9Post-tax profit on disposal ofJoint Ventures - - (5.9)--------------------------------- ---------- ---------- --------Normalised earnings 22.0 21.2 51.0--------------------------------- ---------- ---------- -------- pence pence pence--------------------------------- ---------- ---------- --------Basic earnings per share 21.9p 21.3p 57.0pFully diluted earnings per share 21.5p 21.0p 55.9pNormalised basic earnings pershare 21.9p 21.3p 51.1pNormalised fully dilutedearnings per share 21.5p 21.0p 50.1p--------------------------------- ---------- ---------- -------- Normalised EPS adjusts for post tax profit on disposal of Joint Ventures and isconsidered to be a more representative measure of underlying trading. 7. Dividends ---------------- -------- -------- -------- -------- -------- -------- Six months to Six months to Six months to Six months to Year to Year to 30 Sept 2006 30 Sept 2006 30 Sept 2005 30 Sept 2005 31 March 2006 31 March 2006 pence £m pence £m pence £m---------------- -------- -------- -------- -------- -------- --------Final dividendrecognised forthe year ended31 March 2006(2005) 11.5p 11.6 8.0p 7.9 8.0p 7.9Interim dividendrecognised forthe periodended 30September(2005) - - - - 4.5p 4.5---------------- -------- -------- -------- -------- -------- --------Dividendsrecognised inthe period 11.5p 11.6 8.0p 7.9 12.5p 12.4---------------- -------- -------- -------- -------- -------- -------- Interim dividendproposed forthe periodended 30September 2006(2005) 6.0p 6.0 4.5p 4.5 4.5p 4.5Final dividendproposed forthe year ended31 March 2006 - - - - 11.5p 11.5---------------- -------- -------- -------- -------- -------- --------Dividendsrelating tothe period(paid andproposed) 6.0p 6.0 4.5p 4.5 16.0p 16.0---------------- -------- -------- -------- -------- -------- -------- 8. Statement of changes in equity ----------------------- ------ ------- ------- -------- -------- Ordinary Share Merger Retained Equity shares premium reserve (loss)/ shareholders' £m account earnings (deficit)/funds £m £m £m £m ----------------------- ------ ------- ------- -------- --------Balance at 31 March 2006 0.5 62.4 8.9 (107.9) (36.1)Profit for the period - - - 22.0 22.0Dividends - - - (11.6) (11.6)Actuarial loss on retirement benefitliabilities (note 11) - - - (15.4) (15.4)Share based movements - - - 0.1 0.1EmployeeBenefit Trusts - - - 2.4 2.4Share of JointVenture financialderivatives - - - 4.0 4.0Net differences onexchange - - - (0.4) (0.4)----------------------- ------ ------- ------- -------- --------Balance at 30September 2006 0.5 62.4 8.9 (106.8) (35.0)----------------------- ------ ------- ------- -------- -------- The amounts above are shown net of taxation. 9. Cash generated from operations ------------------------------ ----------- ----------- --------- Six months to Six months to Year to 30 Sept 2006 30 Sept 2005 31 March 2006 £m £m £m------------------------------ ----------- ----------- ---------Continuing operationsProfit for the period 22.0 21.2 56.9Adjustments for:Taxation 8.9 7.0 17.9Finance income (4.5) (4.0) (7.9)Finance cost 3.2 5.9 11.2Share of post-taxlosses/(profits) from JointVentures 0.3 (4.2) (8.8)Profit on disposal of JointVentures - - (6.4)Depreciation charges 9.7 6.8 14.7Amortisation of softwareintangible assets 5.4 3.6 9.6Amortisation of acquisitionintangible assets 0.2 - -Release of deferred income (0.4) (0.4) (0.8)Share based payments 2.4 1.5 3.0Loss on disposal of property,plant and equipment 0.2 - 0.7Movement in provisions (1.6) 0.5 (0.1)Movement in working capital (53.1) (8.6) 21.7------------------------------ ----------- ----------- ---------Cash (used in)/generated fromcontinuing operations (7.3) 29.3 111.7------------------------------ ----------- ----------- --------- 10. Analysis of net funds ------------- --------- ------ -------- ------ -------- -------- At 31 March Cash flow Other non cash Exchange At 30 Sept At 30 Sept 2006 changes movement 2006 2005 £m £m £m £m £m £m------------- --------- ------ -------- ------ -------- --------Cash and cashequivalents 177.4 (54.5) (2.5) 120.4 120.1Financialassets 40.8 6.4 - - 47.2 45.0Debt duewithin oneyear (2.7) 2.7 - - - -Debt due afterone year (20.6) 1.4 - 1.3 (17.9) (23.3)Finance leases (18.3) 1.9 2.3 - (14.1) (14.6)------------- --------- ------ -------- ------ -------- --------Net funds 176.6 (42.1) 2.3 (1.2) 135.6 127.2------------- --------- ------ -------- ------ -------- -------- 11. Retirement benefit liabilities The Group operates both defined benefit and defined contribution schemes. Thetwo main defined benefit schemes are the Atkins Pension Plan and the RailwaysPension Scheme. Other pension schemes include the Atkins McCarthy Pension Schemein the Republic of Ireland and a range of defined contribution schemes orequivalent. All defined benefit schemes are effectively closed to new entrants. The main assumptions used for the IAS 19 valuation of the retirement benefitliabilities for the Atkins Pension Plan and the Railways Pension Scheme arelisted in the table below. 30 Sept 2006 30 Sept 2005 31 March 2006 ------------------------- -------- -------- --------Price inflation 2.90% 2.75% 2.85%Rate of increase of pension in paymentLimited Price Indexation 2.90% 2.75% 2.85%Limited Price Indexation to 2.5% 2.50% 2.50% 2.50%Fixed 5.00% 5.00% 5.00%Rate of increase in salaries 4.40% 4.25% 4.35%Rate of increase for deferredpensioners 2.90% 2.75% 2.85%Discount rate 5.05% 5.00% 5.00%Expected rate of return on planassets 6.90% 6.70% 6.90%Expected rate of social securityincreases 2.90% 2.75% 2.85%Longevity at age 65 for currentpensionersMen 18.7 years 18.2 years 18.7 yearsWomen 21.7 years 21.2 years 21.7 yearsLongevity at age 65 for futurepensioners (current age 45)Men 20.9 years 19.0 years 20.9 yearsWomen 23.9 years 21.9 years 23.9 years------------------------- -------- -------- -------- The components of the defined benefit pension cost are as follows: ------------------------- -------- -------- -------- Six months to Six months to Year to 30 Sept 2006 30 Sept 2005 31 March 2006 £m £m £m------------------------- -------- -------- --------Cost of salesCurrent service cost 11.3 9.0 18.6Curtailment gain - - (0.5)------------------------- -------- -------- --------Total service cost 11.3 9.0 18.1------------------------- -------- -------- --------Finance (income)/costFinance cost 25.8 21.5 42.9Expected return on planassets (24.6) (18.0) (36.2)------------------------- -------- -------- --------Net financecost 1.2 3.5 6.7------------------------- -------- -------- --------Total charge to incomestatement for definedbenefit schemes 12.5 12.5 24.8------------------------- -------- -------- --------Statement of recognised income andexpenseGain/(loss) on pensionschemes assets (23.4) 43.4 88.4Changes in assumptions 1.4 (58.7) (126.1)------------------------- -------- -------- --------Actuarial loss (22.0) (15.3) (37.7)Deferred tax charged toequity 6.6 4.6 11.3------------------------- -------- -------- --------Actuarial loss (net ofdeferred tax) (15.4) (10.7) (26.4)------------------------- -------- -------- -------- Retirement benefit liabilities comprise the following: ------------------------- -------- -------- -------- Six months to Six months to Year to 30 Sept 2006 30 Sept 2005 31 March 2006 £m £m £m------------------------- -------- -------- --------Defined benefitobligation (1,055.6) (928.7) (1,021.9)Fair value ofplan assets 742.6 640.0 722.0------------------------- -------- -------- --------Retirement benefitliabilities (313.0) (288.7) (299.9)Deferred tax on retirementbenefit liabilities 93.9 86.6 90.0------------------------- -------- -------- --------Post-tax retirementliabilities (219.1) (202.1) (209.9)------------------------- -------- -------- -------- Under the Atkins Pension Plan there are retirement benefit liabilities of£286.2m (30 September 2005: £263.8m; 31 March 2006: £277.4m) representing£200.3m after deferred tax (30 September 2005: £184.7m; 31 March 2006: £194.2m). Under the Railways Pension Scheme there are retirement benefit liabilities of£26.3m (30 September 2005: £24.5m; 31 March 2006: £22.0m) representing £18.4mafter deferred tax (30 September 2005: £17.2m; 31 March 2006: £15.4m). Movements in the retirement benefit liabilities are as follows: ------------------------- -------- -------- -------- Six months to Six months to Year to 30 Sept 2006 30 Sept 2005 31 March 2006 £m £m £m------------------------- -------- -------- --------At beginning of period (299.9) (274.2) (274.2)Service cost (11.3) (9.0) (18.1)Net finance cost (1.2) (3.5) (6.7)Contributions 21.4 13.3 37.1Acturial loss (22.0) (15.3) (37.7)Foreign exchange - - (0.3)------------------------- -------- -------- --------At end of period (313.0) (288.7) (299.9)------------------------- -------- -------- -------- The approximate effect on the liabilities from changes in the main assumptionsused to value the liabilities are as follows: Effect on plan liabilities Change in Atkins Pension assumption Plan--------------------- ----------------------- ------------------------Discount rate Increase/decrease 0.50% Decrease/increase 10.00%Inflation Increase/decrease 0.50% Increase/decrease 6.50%Real rate of increase in salaries Increase/decrease 0.50% Increase/decrease 2.00%Longevity Increase 1 year Increase 4.00%--------------------- ----------------------- ------------------------ The effect of the change in inflation on the liabilities assumes a correspondingchange in salary increases and inflation-related pension increases. 12. Business combinations On 21 June 2006 the Group acquired 100% of the share capital of Mantix GroupLimited, a UK registered entity, for consideration of £11.2m, consisting of£10.8m cash consideration and £0.4m deferred consideration. On 24 April 2006 the Group acquired 100% of the share capital of Poolman HarlowLimited, a UK registered entity, for consideration of £0.6m, consisting of £0.4mcash consideration and £0.2m deferred consideration. ----------- ---------- -------- Total carrying Fair Total value value Fair value £m adjustments £m £m--------------------- ----------- ---------- --------Other intangible assets - 1.2 1.2Accounts receivable 2.2 - 2.2Cash 2.5 - 2.5Short term trade and other payables (1.8) - (1.8)Tax liabilities (0.2) - (0.2)--------------------- ----------- ---------- -------- 2.7 1.2 3.9Goodwill on acquisition 8.1--------------------- ----------- ---------- --------Consideration 12.0--------------------- ----------- ---------- -------- Consideration:Cash paid 11.4Deferred consideration 0.6--------------------- ----------- ---------- -------- 12.0--------------------- ----------- ---------- -------- Fair value adjustments, which are provisional, represent various identifiableintangible assets measured at an estimated value in use. Included in the goodwill recognised above are items that cannot be individuallyseparated and reliably measured due to their nature. These include new customersand synergy benefits. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
ATK.L