CRANE ON THE CASE: Loan firm Moneybarn tried to take my car in four-hour ordeal - but I don't think I'm behind on payments
I'm starting a new anti-FIRE movement called CHILL, says ANDREW OXLADE - why financial independence at all costs may not be worth it
BUSINESS LIVE: BT shares jump 10% as it beats forecasts; EasyJet boss to step down; United Utilities profits slump amid sewage pressure
We started investing for our first daughter when she was born and the account is up 72.66% in five years, writes LEE BOYCE
The age you can tap work and private pensions will rise to 57 in 2028: How to avoid it disrupting YOUR retirement
Young people most likely to get in debt with loan sharks, as data shows more turn to illegal lending
My mortgage was declined because the valuer said the home isn't in a 'saleable' area: What does that mean - and what should I do?
Is your ex hiding assets to avoid sharing them in a divorce? Retired judge STEPHEN GOLD explains what happens if bitter spouses go rogue
BT shares jump as it ups dividend despite losing almost half-a-million broadband customers - and new boss sets out plans
EasyJet boss to step down as it rakes in £1bn from seats and other extras this year - but still made a huge loss
America's inflation figures are a gift for Bailey - now it's time to cut UK rates, says ALEX BRUMMER
Bumper blue chips send Footsie to another record closing high amid a flurry of good company news
British tech firm Raspberry Pi eyes £500m London float in much-needed boost for the City
Czech Sphinx makes his move to buy Royal Mail: UK's £60bn foreign takeover frenzy steps up with £3.5bn offer
This rising Asian star is primed for growth
Fraudsters are brazenly advertising fake banknotes on social media including £150k of moody cash for £10k, currency firm warns
Taxpayers being let down by HMRC: Those looking for help spent 798 YEARS on hold in a single tax period
The five best bank accounts to switch to: Our top picks for those looking for interest, perks and cashback
I'm 77, still working and worth £2.6m - how much inheritance tax will my family face and how can I cut the bill?
Savers are rushing to open these new savings accounts paying up to 5.05% - should you? SYLVIA MORRIS explains
Scottish Widows gave my ex-wife £8,000 from my pension - 14 years after we divorced!
The best month to sell your car REVEALED: Why SUVs get the highest price at a different time of year - and the fastest selling cars right now
Car makers will miss Government target for electric vehicle sales this year, MPs told
Most Britons have no interest in heat pumps, survey shows - but they ARE keen on using green hydrogen

Tight UK public spending hits WS Atkins earnings

By This Is Money
Updated: 10:20 EDT, 16 June 2011

View
comments

Support services group WS Atkins has managed to counteract faltering UK profits with a strong performance overseas.

Looking abroad: Strong performance in US and Middle East

The Epsom-based firm saw UK operating profits slide to £61.4m in the year to March 31, from £77.3m the year before.

But more upbeat results in the Middle East and US helped it to achieve a 7.5% rise in underlying operating profit to £118.7m.

Total revenue, including the company's share in joint ventures, rose to £1.61bn from £1.42bn. The total annual dividend was raised by 5.5% to 29p.

Although its figures met City expectations, the firm's shares fell 36.5p to 768.5p in trading today.

WS Atkins, which helped design the Olympic Park and is also behind the M25 motorway widening project, admitted its UK performance had been mixed as it contended with 'tight' public spending.

But the company said its outlook in the UK was stable, with its wide range of operations and sectors enabling it to weather short-term pressures.

It added: 'Work in hand is broadly consistent with the same time last year and we enter the new financial year with confidence in our ability to navigate what remains a difficult market.'

It cut UK staff numbers by 7% to 9,640 in the past financial year.

Earlier this month, WS Atkins announced its chief executive Keith Clarke would step down this summer after nearly eight years in the job.

He will be succeeded by Dr Uwe Krueger from private equity investment firm Texas Pacific Group.

The company also recently revealed measures to combat its £293m pension deficit, including making contributions into the fund and consulting with staff about severing the link between their accrued pensions and future salary rises.

View from the City

'US contribution, growing exposure to energy and gradually improving conditions across the Middle East highlight a changing business mix and support to growth, providing confidence in forecasts and the valuation potential,' said David Brockton of investment bank Espirito Santo.

He reiterated its buy rating on the stock.

Graham Brown of broker Evolution pointed out that the acquisition of US business PBSJ contributed £228m to revenues and £10m to pre-tax profit.

'In effect, the core business has contracted by 4% in revenue terms with a more modest contraction at the operating and profit before tax levels,' he said.

He added that the shares had outperformed in the past quarter and downgraded the stock from reduce to sell on the grounds there was better value elsewhere in the sector.

Christopher Bamberry of Peel Hunt said WS Atkins had delivered a strong set of results, which were 5% ahead of his broker's expectations, because of the outperformance of the Middle East business.

But he maintained a hold recommendation, saying: 'With over 50% exposure to the UK and the shares trading on a 5-10% premium to its UK consultant peer group, we believe that the shares are rated highly enough.'

Some links in this article may be affiliate links. If you click on them we may earn a small commission. That helps us fund This Is Money, and keep it free to use. We do not write articles to promote products. We do not allow any commercial relationship to affect our editorial independence.