Atkins half year results: Profits climb despite impacts on revenue

UK business shows strong continued growth in highways ad transportation

Antony Oliver
14 November 2014

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Atkins half year results this week revealed underlying operating profits had climbed 4.5% year on year to £53M despite revenues being impacted by the sale of its UK highways services business and by fluctuations in currency.

Overall this meant that revenues for the six months to 30 September fell by £84M to £831.4M, reflecting, it said, the highways services business’s £73.7M of revenue in the prior year, and adverse currency effects of £33.6M.

"We have entered the second half with good work in hand, providing us with confidence for our outlook for the full year, which remains unchanged.” Uwe Krueger, chief executive, Atkins

Atkins also this week announced a restructure of its UK and Europe business, with chief executive David Tonkin stepping down for personal reasons and Nick Roberts stepping in to run a new business focused around four operating divisions – see story here.

In the UK and Europe revenue from continuing businesses was also down around 5%, largely from market downturns in aerospace and in Scandinavia and Portugal.

Highways and transportation and design and engineering businesses however had fared well on the back of the “UK Government’s maintained focus on infrastructure investment”, Atkins said.

However it added: “The region’s profitability was further impacted by a number of outstanding contract variation negotiations in our UK rail business”. 

Atkins also reported a £4.4M dent in its profits as a result of its failed bid to buy Parsons Brinckerhoff.

Elsewhere, margin in North America, rose following a business reorganisation into five market facing business units and the introduction of a new technical professional organisation and in the Middle East the business had benefitted from the mobilisation and design delivery on a number of large metro projects.

Overall staff number rose by 2% over the period to 17,898 at the end of September, it said and a 2.8% increase on the same time last year.

“These are good half year results, despite currency headwinds, which demonstrate continued progress with our strategy,” said Uwe Krueger, chief executive officer. 

“The improvement in the Group’s underlying operating margin reflects our continued focus on operational excellence, supported by the sale of a number of lower margin, non-core businesses as part of our portfolio optimisation. The group’s financial position remains strong. We have entered the second half with good work in hand, providing us with confidence for our outlook for the full year, which remains unchanged.”

Highlights

•     Revenue up 2% excluding effects of currency, acquisitions and disposals
•     Underlying profit before tax up 4.9%
•     Underlying operating margin of 6.4%, up 90 basis points year on year
•     Strong results in the Middle East and Energy
•     Mixed UK and improving North American performance
•     Strong financial position with net funds of £155.3m
•     Interim dividend increased by 4.8% to 11.0p
•     Outlook for the full year unchanged.

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