Third quarter trading update - 11 February 2015
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 2014 to date.
View the Third quarter trading update - 11 February 2015 as a PDF.
Group performance
The Group continues to trade in line with our expectations and our outlook for the full year remains unchanged.
United Kingdom and Europe
The performance of our UK business continues to be mixed. We have made some progress in the resolution of the contract variations in our rail business and have right sized our aerospace business to reflect current market opportunities. Our highways and design and engineering businesses have both traded well in the period, reflecting healthy UK infrastructure markets. Overall, we expect to achieve an improved operating margin through the second half of the year.
North America
Our North American business has maintained its focus on operational excellence, with its new operating model now fully established. We expect the region's second half revenue to reflect overall market conditions that remain relatively flat and, as previously stated, we continue to anticipate year on year margin improvement in our consultancy business.
Middle East
Our strong first half performance has continued and we remain busy delivering a number of significant projects, including Riyadh metro and two lines on the Doha metro programme. Looking forward, we continue to see a good pipeline of work across our focus sectors of rail, infrastructure and property to support the business in the year ahead.
Asia Pacific
The Asia Pacific region has traded in line with our expectations in the period, despite a slowdown in our markets in mainland China. 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.
Energy
Our oil and gas, nuclear and power businesses have continued to perform well through the second half. We have recently started to mobilise resources on our SDP (Silos Direct Encapsulation) contract at Sellafield, in the UK, which will drive future growth in our nuclear business. The integration of our two recent acquisitions in North America, Nuclear Safety Associates and Houston Offshore Engineering, is progressing well.
While our oil and gas business is as much operating expenditure as capital expenditure focused, we continue to monitor the trading environment closely given the impact of a lower oil price on our clients' spending levels.
Balance sheet
The Group's financial position remains strong. We expect to report net funds of around £135m at 31 March 2015, after reflecting the consideration for the acquisitions of both Houston Offshore Engineering and Terramar, a 62 person consultancy in Norway, completed since the half year.
During the period we have received support from our lenders to amend our £200m revolving credit facility to take advantage of current market conditions. In addition, the facility has been extended to a new maturity date of January 2020.
Outlook
The Group continues to trade in line with our expectations and our outlook for the full year remains unchanged.
The Group will publish a pre close trading update on 8 April 2015.
Ends
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1. Notes to editors: *15th largest global design firm (Engineering News-Record 2014) and the third largest multidisciplinary consultancy in Europe (Svensk Teknik och Design 2013).
2. Analyst Conference Call
3. Cautionary statement 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. |
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