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Healthy profits for Atkins, but Metronet remains 'critical'

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A RENEWED focus on engineering enabled consultant Atkins to grow total revenues 22% from £1.16bn to £1.4bn and boost pre-tax profits from £50.2M to £72.4M last year.

'We have stuck to planning, engineering and the built environment - that is the business that has legs, ' chief executive Keith Clarke told NCE.

'Clients want more for less and with a lower carbon footprint. There are some really complex issues and it is no longer enough to just have a narrow solution - quality engineering has to provide a more complex solution.' Star performers were the Design & Engineering Solutions business, which saw revenue for the year to 31 March 2006 up 17% to £286M and profit up 11% to £23.4M, and the Management and Project Services division with 51% profit growth to £13.9M on revenues of £172M.

The fires were dented only by continued problems with Atkins' Metronet business that contributed to the 71% fall in profits in the Rail business, down from £8.9M last year to £2.6M on a turnover of £177M.

Metronet's supply chain problems - in particular the on-going diffi ulties with the London Underground public private partnership programme - was also responsible for Design & Engineering Solutions' business margins dipping to 8.2% from 8.6% last year.

'There is still a long way to go on the recovery of this business, ' said Clarke. 'We are not complacent, and are certainly not pleased about the situation, but we do want to fix it.' Clarke said that the next 12 months were 'critical' for Metronet and confirmed that he would stay on as 'stop-gap' chairman - perhaps for up to a year.

'We need to show a marked improvement in performance.

We have four and a half years to sort this business out ahead of the next period review, ' he said.

Excluding Metronet, Atkins' revenues grew by 10% to £1.05bn with operating margins up from 5.3% last year to 6% in 2006.

Clarke said pressure on staffing had prevented even faster growth as he was committed to ensuring that numbers were maintained at a level the business could cope with.

Overseas, Atkins continued to make lucrative progress, particularly in the Middle East, with revenues up 53% from £44M to £67M and profi ts up from £2.1M to £3M.

Clarke said that continued efforts would be made to break into China. But he hinted that there was some way to go before this would become a major revenue source.

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