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Aktins reveals £25M Middle East 'hole' in finances

Consultant Atkins has revealed tough market conditions, with ‘no signs’ of recovery in the UK construction market, and confidence ‘yet to return’ to the Middle East, where it revealed a cash collection hole of some £25M there.

In a trading statement to the City, Atkins maintained that the group would meet market expectations, despite laying-off 1,200 staff at a cost of £10M.

In the statement, Atkins revealed: “The majority of our markets remain stable across the Group. Since February, there have been no signs of a recovery in the UK building market and, while we are still winning work in the Middle East, confidence across the region has yet to return.”

In the Middle East: “Cash collection has become more difficult,” it says, “Where there has been a worsening of approximately £25M in the past three months. We expect that cash collection will remain challenging for at least the next few months.

“Despite this, the Group’s cash generation in the last quarter has remained very strong with net funds at 31 March 2009 expected to be over £225M, after taking account of a significant foreign exchange benefit,” it read.

The company’s IAS 19 pension deficit (after tax) has increased to approximately £215M from £154M last year: “Principally as a result of lower asset prices.”

Atkins preliminary results will be announced on 17 June.

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