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Atkins trading in line with expectations

WS Atkins plc ("Atkins" or the "Group"), the design, engineering and project management consultancy, today provides its first quarter trading update for the period from 1 April 2015 to date.

Group performance

The Group has traded in line with expectations and the outlook for the full year remains positive.

United Kingdom and Europe

At the start of this financial year we transitioned to a new simplified organisational structure in the UK, centred on four market facing business units, which will enable greater internal collaboration and heightened client proximity, delivering both revenue and margin improvements.

Our newly combined transportation business has traded well in the period. We continue to closely monitor our aerospace business to ensure we are right sized for current market opportunities and have made further staff reductions since the year end.

Looking further ahead, we welcome the clear recommendation of the recently published Davies report and we look forward to supporting future developments in the UK's airport infrastructure.

We were pleased to have completed the disposal of our Portuguese business to Bedrock Investments Ltd on 24 June, under which Atkins paid Bedrock a cash sum of £2.1m. The business, which employs 51 people, reported a loss of £1.2m in the year to March 2015.

North America

Our North American business continues to experience stable market conditions, with Federal support for transportation infrastructure constrained to short term funding commitments. The benefits from our organisational structure continue to deliver improved productivity within our technical professional organisation (TPO) and this, together with ongoing overhead reductions, will further improve our margin performance as we progress through the year.

Middle East

The Middle East has enjoyed a good start to the new financial year as we remain busy delivering a number of significant projects, including Riyadh Metro in the KSA and the Doha Metro Gold Line in Qatar. While we have observed some client caution regarding infrastructure and property commitments, we continue to see a steady pipeline of work to support the business in the year ahead.

Asia Pacific

Our Asia Pacific business has traded in line with our expectations, despite the previously flagged slowdown in our markets in mainland China. Our strategy of geographic diversification continues and, in particular, we have now established an architecture practice in Singapore with a South East Asian focus and elsewhere are making good progress in developing our relationships with outbound Chinese contractors.

Energy

Our nuclear, power and renewables businesses have traded well in the first quarter. We continue to expand the international portfolio of our nuclear business and were recently awarded a contract to undertake fire hazard analysis services at the Fukushima Daiichi nuclear power station in Japan by Tokyo Electric Power Company (TEPCO).

Our oil and gas business, which in the last financial year represented just over 40% of our Energy segment (less than 5% of Group revenue), remains focused on structural and asset integrity and, while client spend continues, we are facing pricing pressure and the impact of deferral and cancellation of some projects. We have reduced our headcount by around 125 in our UK and North American oil and gas operations. The majority of these employees have been redeployed in other parts of our business.

Overall we still expect to see revenue growth in our Energy business in the current year, although the first half margin will be impacted.

Balance sheet

Despite the normal seasonal working capital outflow, the Group's financial position remains strong with net funds at the end of June of just under £150m.

Outlook

The Group has traded in line with expectations through the first quarter and the outlook for the full year remains positive.

Ends

Enquiries

Heath Drewett
Group finance director
+44 20 7121 2000
Kate Moy
Investor relations director
+44 20 7121 2000
Sara Lipscombe
Group communications director
+44 20 7121 2000

Notes to editors

Atkins (www.atkinsglobal.com) is one of the world's most respected design, engineering and project management consultancies, employing some 18,000 people across the UK, North America, Middle East, Asia Pacific and Europe. We build long term trusted partnerships to create a world where lives are enriched through the implementation of our ideas. You can view Atkins' recent projects on our website.

Analyst Conference Call

A conference call for analysts will be held at 0800 hours today. Dial-in details are available on +44 (0) 20 7121 2693.

Cautionary statement

This announcement has been prepared for the shareholders of Atkins as a whole and its sole purpose and use is to assist shareholders to exercise their governance rights. In particular, this announcement has not been audited or otherwise independently verified and no warranty is given as to its accuracy or completeness (other than any such warranty which is mandatorily implied by statute). Atkins and its directors and employees are not responsible for any other purpose or use or to any other person in relation to this announcement and their responsibility to shareholders shall be limited to that which is imposed by statute.

This announcement contains indications of likely future developments and other forward looking statements that are subject to risk factors associated with, among other things, the economic and business circumstances occurring from time to time in the countries, sectors and business segments in which the Group operates. These and other factors could adversely affect the Group's results, strategy and prospects. Forward looking statements involve risks, uncertainties and assumptions. They relate to events and/or depend on circumstances in the future which could cause actual results and outcomes to differ materially from those currently expected. No obligation is assumed to update any forward looking statements, whether as a result of new information, future events or otherwise.