WS Atkins : Trading statement - 09 April 2014

Trading statement - 09 April 2014

View the Trading statement 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 2014 in advance of its preliminary results announcement on 12 June 2014.

The Group has traded well through the fourth quarter with strong cash flow generation, and we expect to report results for the year ended 31 March 2014 in line with expectations.

United Kingdom and Europe

Overall, our UK business has performed well during the year. Revenue for the region is expected to be broadly flat year on year, despite the impact of the disposal of our UK highways services business during the year. As previously noted, the UK regional operating margin is expected to show an improvement in the second half as a result of this disposal, together with the ongoing benefits of our operational excellence programme.

Scandinavia continues to track in line with our expectations, with turnover steady.

North America

We have experienced stable market conditions in our North American business throughout this financial year. Our highways and transportation business has traded well and we are making progress with the reorganisation of our infrastructure and environment business. The initial financial benefits from the roll-out of our operational excellence programme across the region are expected to show through in the next financial year.

Middle East

As anticipated, our Middle East business has delivered an improved performance in the second half. We are mobilising resources on our recent metro wins in the region and the impact of these major projects, together with the addition of the Confluence team based in Abu Dhabi, will be reflected in good headcount growth for the region through the second half.

Asia Pacific

Our Asia Pacific business has enjoyed a good end to the year and our strategy of diversification beyond our historic focus on the Hong Kong rail sector, together with our investment in new geographies, continues. We were pleased to be recently appointed to undertake project management consultancy services for the West Kowloon cultural district development in Hong Kong, securing this major project demonstrates our commitment to growth and diversification in Hong Kong and the Asia Pacific region. We have also won the concept design, working alongside China Southwest Architectural Design and Research Institute, for the new Qingdao airport in the Shandong province of China.

Energy

The strong first half performance of our oil and gas and nuclear businesses has been maintained through the second half. We have moved closer to achieving regulatory approval for the acquisition of Nuclear Safety Associates, Inc., a process we hope to conclude in the next quarter. This will augment our skills base with 130 people in nuclear safety and professional security services in the North American market.

A number of significant project opportunities exist across our energy business, which gives us confidence for future progress.

Balance sheet

The Group's financial position remains strong and following a very good cash performance in the second half, we have increased our guidance for net funds at 31 March 2014 to around £180m.

Given the continuation of historically low discount rates throughout the year, the Group expects to report an increase in its year end IAS19 pension deficit from that reported at 31 March 2013, with a consequent increase in the Group's pension interest charge in the year ending 31 March 2015.

Outlook

Our overall outlook for the full year remains unchanged and we are confident of taking further steps towards the achievement of our strategic goals in the next financial year.

Ends