Atkins' admitted today that its shareholding in underperforming Tube contractor Metronet has cost the firm a £1.4M reduction in profit before tax, according to interim results for six months ended 30 September 2006.
Although group pretax profit rose from £28.2M to £30.9M, on the same six months in 2005, the consultant admitted that Metronet's performance reduced profitability by £1.4M.Revenue at the company rose from £516.1M to £605.5M. This was despite joint venture activities going from a £6.2M profit to a £400,000 loss. This reflected financial penalties and additional costs incurred on Metronet work.Chief executive Keith Clarke said: 'The Metronet Enterprise continues to impact the group's results and has contributed a £1.4M reduction in profit before tax compared to the same period last year. 'The conclusion in the Arbiter's recent report that Metronet was not performing in an economic and efficient manner was as expected. Whilst some improvements have been made, much still remains to be done to enable Metronet to achieve its goal of being economic and efficient overall at the end of the first review period in September 2010.''The markets in which we operate continue to provide good prospects and we are confident that our wholly owned operations will continue to grow. Our work in hand remains strong with 88% of forecast year end revenue secured,' said Clarke.'The recovery in the performance of the Metronet Enterprise remains crucial to its eventual success and the realisation of Atkins' returns. We are working with all of Metronet's stakeholders to review the current arrangements to improve the efficiency and effectiveness of delivery.'