News releases 2016
Pre close trading update - 13 April 2016
View the Pre close trading update as a PDF.
Pre-close trading update
WS Atkins plc (“Atkins” or the “Group”), the design, engineering and project management consultancy, today provides an update on trading for the year ended 31 March 2016 in advance of its preliminary results announcement on 16 June 2016.
The Group has traded well through the fourth quarter. We expect to report underlying results for the year ended 31 March 2016 in line with expectations, as we make good progress towards our 8% Group operating margin target.
United Kingdom and Europe
Our UK and Europe business is expected to show good margin progress in the second half of the year, and we continue to benefit from the UK Government’s ongoing commitment to infrastructure spending.
As part of a joint venture with CH2M and SENER, we have recently been appointed as Engineering Delivery Partner for the High Speed 2 project. This contract, valued at between £250 million and £350 million to the joint venture, is expected to run for 10 years. It covers the civils, stations, planning and environment, and railway systems aspects of Phase 1 of the project.
Our North American business continues to operate within stable infrastructure markets. While certain parts of our business with a greater reliance on Federal funding continue to be challenged by project award delays, we expect to deliver an improved second half performance after a first half impacted by bidding costs on major projects. We were delighted to be appointed recently as lead designer to Fluor on the $2bn Maryland Purple Line light rail transit project.
In the Middle East we have been busy through the second half with our work on the Riyadh metro and two lines of the Doha metro programme, in what we expect to be a strong year for the region. As previously highlighted, there remains some uncertainty about the timing and funding of some of our pipeline opportunities, particularly in property and government infrastructure.
On 3 March we were pleased to reach agreement on the acquisition of Howard Humphreys (East Africa) Limited, subject to normal regulatory clearances. This multidisciplinary consultancy, based in Kenya and Tanzania, employs around 200 people and has a strong track record in the transportation, water and property markets. The acquisition is an important catalyst to develop our presence within East Africa’s rapidly growing infrastructure market.
Our Asia Pacific business has traded in line with expectations through the last quarter, despite the previously reported slowdown in mainland China. We anticipate current market conditions continuing into the next financial year.
Our nuclear, power and renewables businesses continue to grow in line with our expectations. The performance of our oil and gas business is mixed, with the most difficult trading conditions being experienced by our North American business, offset to some extent by growth opportunities in the Middle East.
Following receipt of the necessary regulatory approvals, we were pleased to complete the acquisition of the Projects, Products and Technology (“PP&T”) segment of EnergySolutions on 11 April. This innovative nuclear energy business, comprising 650 people, will significantly enhance the Group’s current nuclear capability, particularly in North America.
The Group’s financial position remains strong. We expect to report net funds of around £190m at 31 March 2016, prior to funding the cost of the PP&T acquisition.
During the period we negotiated a new £100m, three-year revolving credit facility (“RCF”) with our tier one relationship banks. This new facility is in addition to the Group’s existing £200m five-year RCF and $75m US Private Placement debt, with maturity dates of 2020 and 2019 respectively.
Group finance director
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Investor relations director
|+44 (0) 20 7121 2000
Group communications director
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1. Notes to editors
Atkins (www.atkinsglobal.com) is one of the world's most respected design, engineering and project management consultancies, employing over 18,600 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.
2. 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.
3. 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.