16th Apr 2008 07:00
Atkins (WS) PLC16 April 2008 Trading Update WS Atkins plc ("Atkins" or "the Group"), the design and engineering consultancygroup, today provides an update on trading for the year ended 31 March 2008 inadvance of its preliminary results announcement on 25 June 2008. Overall, the Group has performed well and profit before tax from continuingoperations for the year ended 31 March 2008 is anticipated to be towards the topend of current market expectations. Cash generation has remained strong withnet funds at 31 March 2008 expected to be approximately £165 million. Business Segments Our Design and Engineering Solutions segment has continued to perform wellalthough margins have been slightly impacted by the integration costs associatedwith the acquisition of Advantage and Nedtech. Our workload is good and we haverecently won the Learning and Skills Council framework contract to providedesign services. We are the only multi-discipline organisation to have beenselected across all three geographic regions in the UK. Performance in the Rail segment has significantly improved and our workload isrobust despite the reduced activity for Metronet. Work on the Rugby andNuneaton re-signalling contract is going well and we have won contracts for thedesign of Thameslink's Farringdon and Borough Market stations. The performance of the Highways and Transportation segment remains good. Wehave recently been formally awarded the five-year Highways Agency Area 6 MACcontract in East Anglia; service delivery will commence on 1 June 2008. We alsorecently won the design contract for the M74 completion project near Glasgow. Our Middle East business continues to grow rapidly with staff numbers now over2,400, an increase of nearly 700 over the financial year. Workload remainsstrong and we continue to see opportunities to expand our service offering inthe region. Performance in China and Europe is in line with expectations and weare optimistic that progress will be made in the year ahead. Performance of the Management and Project Services segment is overall slightlybehind expectations as a result of the poor performance from the ManagementConsultants business. The cost consultancy business has performed well withfurther growth in the USA which is expected to continue. Disposal We also announce today that the Group has sold its 25% interest in ModernHousing Solutions to Carillion and Enterprise. The Group received £3.9 millionin cash at completion on 1 April 2008. Pensions The Group has reached agreement with the Trustees of the Atkins Pension Plan onthe latest actuarial valuation. The actuarial deficit as at 1 April 2007 hasbeen estimated to be £215 million, an increase compared with the last valuationprimarily due to more conservative assumptions for longevity and futureinvestment returns. The Group and Trustees have also agreed a recovery plan to eliminate theactuarial deficit by 31 March 2014. As part of that recovery plan, the Groupmade deficit contributions of £37.5 million in the year to 31 March 2008 and afurther contribution of £12.5 million on 1 April 2008. Contributions of £32million per annum are expected to be made by the Group for the next six years. Share Buyback Following the announcement of a share buyback programme in November 2007, theGroup has purchased 3,218,000 shares for an aggregate cost of £34.9 million asat 31 March 2008. Discontinued Operations As announced in the half-year results, the results for the full year willinclude one-off gains in respect of the disposal of Lambert Smith Hampton (£20million) and the release of deferred income in relation to Metronet (£11.2million). Outlook The Group's order book is strong and we remain confident that the Group willmake good progress in 2008/09. Enquiries Atkins:Robert MacLeod, Group Finance Director + 44 (0) 1372 726140Sara Lipscombe, Group Communications Director Smithfield:Tom Hardman +44 (0) 20 7360 4900 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 world's fifthlargest international design firm (sources: New Civil Engineer Consultants File,2007; Building Magazine, 2007; Engineering News Record, 2007). 2. Analyst Conference Call There will be a conference call for analysts at 08:30 today. Details areavailable from Tom Hardman at Smithfield (details above). 3. Disposal of Modern Housing Solutions The Group's 25% interest in Modern Housing Solutions (Prime) Limited waspurchased by the other existing shareholders, Carillion Holdings Limited andEnterprise Managed Services Limited. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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