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Atkins reports UK falls in profits and staff

17 Nov 11 Profit, revenue, margins and staff numbers in the UK all fell at Atkins in the six months to 30 September 2011.

Atkins chief executive Uwe Krueger
Atkins chief executive Uwe Krueger

In the UK, the average headcount was down around 8% on the same period last year, with 843 fewer people employed.

Revenue was down 7.5% on the same period last year to £420.4m while operating profit fell 20.4% to £24.6m. There were 9,403 members of staff on 30 September, a fall of 8.2% fall compared with the previous year. Operating margins fell 0.9 percentage points from 6.8% to 5.9%.

The slight reduction in the UK headcount since 31 March 2011 primarily reflects a number of staff who were already on notice of redundancy at the year end. Across the group, turnover has increased by 27% compared with the same period last year, on average staff numbers up 13%, largely due to our North American acquisition. 

But worldwide the group’s revenue rose to £842.9m, profit after tax rose 18.7% to £34.9m and staff numbers rose 13.3% to 17,529. More than half of the group’s revenue is now from outside the UK. Across the group, underlying operating profit was up 7% on revenue up 27%, following the acquisition of PBSJ Corporation, now Atkins North America.

Chief executive Uwe Krueger said: "The Group has delivered solid half year results. Our strategic priorities to deliver shareholder value are to drive operational excellence, to optimise our portfolio, and to grow in attractive market sectors. 

Notwithstanding the continuing challenges we face, with our diversified exposure to a range of end markets and geographies and good work in hand as we move into the second half, our overall outlook for the year remains unchanged."

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The Group recently announced the sale of its UK asset management business for £5m payable on completion, together with a deferred conditional amount of £0.5m.  The transaction is expected to complete at the end of November.

The year on year revenue decrease reflects staffing reductions, the majority of which were completed by the end of the last financial year. The company said that its broad multi-disciplinary offering has helped to mitigate the impact of constrained public sector spending, and added resilience continues to be brought to the UK business through its support of projects for the  Middle East operations.

It said that the highways and transportation business has begun the year well, following significant restructuring last year.  However, the overall market remains challenging, with significant pricing pressure.  The highway services business has work in hand, with the first of its existing contracts not scheduled for renewal until 2013.  The consultancy side of the business has won a number of framework contracts.

Design work for the widening of the M25 is almost complete, with the first sections fully open to traffic.  The related 30-year operation and maintenance joint venture contract is progressing in line with our expectations.  

Atkins has recently announced the sale of our UK asset management business, which employs about 550 staff.   

The overall outlook for the UK remains stable, according to the company, with the business working in a number of well-funded markets.  “However, we see a challenging second half of the year for our rail business, due to the delays in signalling projects coming to the market.  We have a solid, diversified platform to help navigate short term market challenges, and a breadth of expertise that will help us exploit opportunities when growth returns,” it said.

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