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Atkins denies staff cuts will follow poor UK results

Atkins reported today that its UK revenue was down 5.8% on last year, and UK profit by 20.6%, but chief executive Keith Clarke insisted that the “difficult” UK market will not lead to further staff cuts.

The company today released its results for the year ended 31 March 2011, with a rise in overall revenue and profits.

Overall, the company’s underlying operating profit was up 7.5%, from £110.4M in 2010 to £118.7M in 2011. Overall revenue also rose, by 12.7% from £1,387.9M in 2010 to £1,564.3M this year.

But UK revenue was £926.5M − £57M less than last year’s £983.5M − and operating profit was £61.4M, down from £77.3M in 2010. UK staff numbers dropped by 7.2% over the year.

Staff numbers rose overall from 15,601 in March 2010 to 17,522 in March 2011 − but this was largely attributed to Atkins’ acquisition of US firm PBSJ.

Atkins said growth in the UK will be difficult in the near term, and it will therefore focus on “managing headcount to meet the anticipated market demand for our services”.

But Clarke denied this meant there would be further staff cuts. “’Managing’ means keeping people’s careers going, reassigning them to different departments,” he said.

“For our UK segment, some parts are growing, some will inevitably shrink,” Clarke said. “We expect to stabilise staff numbers [in the UK].”

The 7.2% reduction in UK staff over the past financial year was due to a combination of natural wastage and redundancies. Atkins said it had continued to “flex” staffing levels across the group in response to market demand for services.

“These are good results. It has positioned us for growth”

Keith Clarke, Atkins

Clarke also said that the company had implemented its plans to increase the standard working week for highways and transportation workers from 37.5 hours to 40 hours, following a consultation on the idea in February.

Clarke said the longer hours have not been rolled out to any other divisions.

The highways and transportation business contracted during the year and had its headcount reduced, partly due to “delays and cancelations of schemes for the Highways Agency and tightening of local authority and central government budgets”, Atkins said.

But the water and environment business of around 1,400 staff was seeing “an improving volume of work” as the latest five-year regulatory Asset Management Programme (AMP5) takes effect.

Atkins said the government’s spending review in October 2010 removed some of the UK market uncertainty and confirmed expectations that public sector spending will remain tight.

But overall, Atkins called it “another good year”. Clarke said: “These are good results. It has positioned us for growth.”

The company said energy in particular was a “large platform for growth”, and said it was confident that its nuclear work would continue.

“We continue to win work for the nuclear new build programme in the UK and we remain confident that
recent events in Japan have not detracted from the UK nuclear new build programme which provides us
with significant opportunities,” the company said.

Atkins said its acquisition of PBSJ in October 2010 would provide “increased resilience in a challenging economic environment”. PBSJ “has great potential in the future,” said Clarke.

Mouchel warning

Mouchel has warned that its short-term outlook remains “very challenging”.

It said in a trading statement this week that local government, which represents more than two-thirds of its client base, has been hard hit by the unexpected speed and depth of government cuts.

WYG in share issue

Consultant WYG has announced plans to raise £30M in equity and clear outstanding debts.

The firm owed £29M as at 31 March. Chief executive Paul Hamer said that following two years of restructuring now was the right time to eliminate the debt and create a stronger balance sheet. This would allow it win new business and to recruit and retain employees, he said.

Hamer was speaking after the firm posted results for the nine months to 31 March 2011. Revenue was £122M for the nine months, compared to £221M for the full year ended 30 June 2010.
Pretax losses were £28.6M.

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