News releases 2016
Third quarter trading update - 10 February 2016
View the Third quarter trading update as a PDF.
Atkins trading in line with expectations
WS Atkins plc (“Atkins” or the “Group”), the design, engineering and project management consultancy, today provides its third quarter trading update for the period from 1 October 2015 to date.
In the context of headwinds in certain markets, the Group continues to trade in line with expectations. Our outlook for the full year remains unchanged as we make good progress towards our 8% Group operating margin target.
United Kingdom and Europe
We were encouraged by the Government’s autumn statement in October which underpinned its commitment to infrastructure spend in the UK. Our transportation business, the largest division in the UK, remains active and during the period we secured the East West Rail Phase 2 scheme as part of our alliance with Volker Rail, Laing O’Rourke and Network Rail. This multi-year contract is expected to deliver up to £100m of revenue for the Group over its life. Overall, while we anticipate little sector revenue growth in the second half, margins are expected to show good progress.
Our North American business is expected to show second half revenue growth year on year as we mobilise resources on the recently won project NEON and, as previously stated, we anticipate some margin improvement in the second half. Looking forward, the agreement reached on a five year Transportation Bill should provide greater pipeline visibility, although we do not expect to see any material impact until after the forthcoming presidential election.
In our Middle East region we have continued to engage significant resources working on the Riyadh metro and two lines of the Doha metro programme, as well as managing the Central Planning Office in Qatar, where our role is nearing completion. Looking forward we remain cautious around the outlook for the region, given increased uncertainty as to the timing and funding of our pipeline opportunities, particularly in property and infrastructure.
The performance of our Asia Pacific region has been stable in the period, despite the slowdown in mainland China which we are expecting to continue through the next financial year. Our strategy of geographic diversification continues and, in particular, we are making good progress in developing our relationships with Chinese contractors as they seek to grow outside their domestic market.
The performance of our oil and gas business continues to be mixed. We have seen a further deterioration in trading conditions, particularly in our more capital expenditure exposed North American business, offset to some extent by growth in the Middle East. Following the demobilisation of the Silos Direct-encapsulation Plant project, our nuclear business has secured additional decommissioning work at Sellafield in the period. In addition, we are progressing the regulatory clearance required for our acquisition of the Projects, Products and Technology (“PP&T”) segment of EnergySolutions, which we anticipate will complete early in the new financial year.
The Group’s financial position remains strong. We expect to report net funds of around £190m at 31 March 2016, excluding the funding of the PP&T acquisition. We are pleased to announce that during the period our current revolving credit facility has been extended by one year to a new maturity date of January 2021.
In the context of headwinds in certain markets, the Group continues to trade in line with expectations and our outlook for the full year remains unchanged.
The Group will publish a pre close trading update on 13 April 2016.
Group finance director
|+44 (0) 20 7121 2000
Investor relations director
|+44 (0) 20 7121 2000
Group communications director
|+44 (0) 20 7121 2000
1. Notes to editors
Atkins (www.atkinsglobal.com) is one of the world's most respected design, engineering and project management consultancies, employing some 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.