W S Atkins full year results boosted by HS2 contracts
CONTRACTS for the preliminary stages of HS2 and a Wolverhampton resignalling project have helped to boost the performance of infrastructure group W S Atkins.
The group has seen annual turnover grow by 9% to £1,711.1m (2011: £1,564.3m), while reported pre-tax profit was up almost 50% to £135.5m (2011: £91.0m); the latter benefiting from £30.9m in pension gains arising from steps taken to actively manage pension liabilities.
The company also generated £7.2m profit from the sale in November last year of its UK asset management business.
Excluding these benefits, together with amortisation of intangible assets on acquisition of £4.2m (2011: £3.7m), underlying pre-tax profit declined by 1% to £101.6m (2011: £102.7m).
Reported operating profit was £137.2m (2011: £107.0m), at a margin of 8% (2011: 6.8%). The year on year increase in margin was primarily due to the one-off pension gains.
The company said its UK rail operation had had a difficult year as a consequence of major signalling work being slow to come to market. This had an impact on operating margins as the group elected to maintain staffing levels in anticipation of project awards by Network Rail.
It said the move had paid off as the position has now improved, with the firm securing two Network Rail signalling projects for Sussex/Wessex and Kent/Anglia, worth in excess of £400m over a seven year period. However, it said while the projects are now beginning to be awarded, there remained delays to work actually starting.
“In addition to these two frameworks, we have secured a number of rail design projects in recent months. These include the Wolverhampton resignalling project and in April the contract to prepare preliminary designs for the high speed line through the Country South section of High Speed 2,” said the group in its full year results statement.
The HS2 work will see the firm carry out environmental impact assessments for the Rural North section covering Warwickshire and Staffordshire. Other large projects awarded to the group include work on Crossrail and the London 2012 Olympic and Paralympic Games.
“We have made good progress in the last 12 months despite the challenging economic environment. During the second half we continued to diversify the business, improved cash flow, reduced our pension liabilities and are returning to growth,” it said.
“We remain focused on driving operational excellence throughout the business to improve margins, optimise our portfolio and meet the evolving needs of our clients. Our strategy is clear and the group is well positioned to deliver further growth in the year ahead.”
