Interview: Atkins UK and Europe ceo Nick Roberts explains firm's latest results

Results show underlying business growth and progress toward 8% margin target as UK business benefits from continued government support for infrastructure despite continued pressure on resources.

Nick Roberts, UK chief executive Atkins

Atkins remains committed to hitting its target of 8% margins after reporting strong preliminary results and an underlying operating margin of 7.6%.

Figures for the year to 31 March 2015 showed group turnover up slightly year on year to £1.757bn with underlying pretax profit up 14.6% to £129.9M – a figure that excludes exceptional items and the benefit of disposals.

“That challenge is not just about remaining competitive but also capitalising on the great set of opportunities that are now ahead of us. There really is plenty to be excited about.” Nick Roberts, Atkins

Turnover in the UK and Europe business was down 9.5% to £903.8M following what the firm described as a “mixed first half” but the £60.7M operating profit represented a growth in margin to 6.7%.

Reorganisation of this business under chief executive Nick Roberts was completed in April and, he said, leaves the business in a simplified shape to “remain focussed on our clients and core markets” in a competitive market.

“That challenge is not just about remaining competitive but also capitalising on the great set of opportunities that are now ahead of us,” he said. “There really is plenty to be excited about.”

In the UK margins were 7.1% with operating profit of £59.4M coming a turnover of £835.6M. 

Atkins results explained: “Our aerospace business faced a market downturn in the year and profitability was further impacted by a number of outstanding contract variation negotiations in our UK rail business, which have now been largely resolved. During the first half, we also rightsized our water and environment business.”

Across the world Atkins now employs 18,462 staff, with 8,885 people in the UK business, where the competitive market for skills saw staff churn rise last year to 12.1%, up from 9.5% the previous year.

Nick Roberts, UK and Europe chief executive explains the driver for the latest results and highlights the challenges and opportunities facing the business

Interview by Antony Oliver

Your latest results show impressive progress in the business. But you highlight reduced turnover in the UK and Europe. Is it still a challenging market?

We are very proud of these results which show great progression in our margin and demonstrate real stability and benefit from our diversity in business and clients. We are very optimistic and see real strength in the market notwithstanding the continued competitiveness.

UK margin sits at 7.1% and you say the group is heading towards 8% - what makes that possible given your reliance on the public sector?

We appreciate the steadfastness of the government commitment to infrastructure underpinned by the National Infrastructure Plan the Road Investment Strategy and Control Periods in Rail and Water to give confidence. But, of course, we know that like everybody we have to respond to the government’s demand for greater efficiency.

You have just completed a reorganisation across the business – what are the key differences for you?

The key part of the restructure was about simplifying things and to remain focussed on our clients and core markets – simplifying our business and enabling greater cross selling. We have great people who are very flexible - clients appreciate that and it gives us a really competitive advantage.

What has been your impact been since joining at the start of the year?

This business is bigger than one person and I am proud of the way that the business has responded to the challenge I put down. That challenge is not just about remaining competitive but also capitalising on the great set of opportunities that are now ahead of us. There really is plenty to be excited about – projects such as High Speed 2, for example – where we are able to deploy our talent and where we are able to stretch ourselves.

Staffing and the war over talent remains a huge challenge –  the UK business saw a 12.1% churn last year up from 9.5% and higher than the group average – why is that and what can you do about it?

Naturally in a warm market, particularly in the south east [of the UK] we see increased churn in our staffing – as so many of our competitor also do. But it also gives us an opportunity to refresh our workforce. The good news is that people do want to come and work for us and the most important thing for us is to ensure we get the best people into the business and that is what we remain focussed on.

You wrote recently in Infrastructure Intelligence about the need to inspire young people to join the industry. You hired 364 new young people last year – is that enough? How do you get more?

We took on over 270 graduates and more that 70 apprentices last year and that is very exciting for the business and we continue to drive those numbers up. Obviously it is a challenge across the industry to attract maths based talent into the business but we are investing in STEM (science, technology, engineering and maths) related projects to help to bring more young people in. That said, finding and employing experienced talent is also very important to us.

What skills do you now need; what sort of young people; and are you doing enough to attract the Millennials?

The future requires a broader range of skills and I am particularly excited about technology and data rich engineering where there is a very big opportunity. We have for example just formed a relationship with [telecoms firm] EE to use their data to help us to understand more about how people use infrastructure. That work will require different skills and is a really exciting new part of the business.

Who are your competitors in this war over skills?

There have always been a large number of competitors in our space but increasingly we are now not competing but partnering with them. For example on the Thames Water eight2O alliance we are working alongside IBM, partnering not competing. Scientists and engineers will always have a huge range of opportunities from people wanting their skills. I’m pleased that they want to come to work at Atkins and that we get a huge selection of this talent.

You recently highlighted the risks to your business from salary inflation and project delays. How do you manage this risk?

We simply have to remain very efficient and we have to remain focussed on delivering the long pipeline of work in the market. Technology gives us the opportunity to be more efficient and the early messages coming from the new government [about continued investment in infrastructure] are all very positive.

But the new government is also committed to a referendum on the UK’s European Union membership. Does that present an additional risk for you?

The political debate is for others but we remain optimistic about the markets in continental Europe that we have chosen to work in. We hope for an outcome which benefits our business but decisions such as our recent acquisitions of Terramar in Norway bring us additional capability.

You highlight the new government’s continued commitment to infrastructure investment and this week's planning consent for the Swansea Tidal Lagoon project on which you work underlines this. How do you see the business outlook for the next few years?

The traditional markets of roads, rail, water, energy and education will continue to provide great opportunity for us as there is great demand in the market for businesses like ours with the best people. Our home core markets are still really great places for us. There are some very significant projects in the pipeline and we continue to be very excited about the future.

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