WS Atkins has seen revenue and underlying operating profit up by 10% in the first half of this year.
Revenue was £994.7M for the six months to 30 September 2016, compared to £904.6M for the same timeframe the year before. Underlying operating profit was up from £59M to £65.3M. Statutory operating profit was hit by an £18.5M impairment of goodwill relating to a US oil and gas project.
In the UK and Europe profits were up 32% thanks to strong markets – given an additional boost by the weak pound – and improved operational delivery.
“We continue to see a healthy pipeline, strong markets, and have seen some significant infrastructure project announcements over last couple of months, such as Hinkley and Heathrow which indicates the prime minister is supportive of infrastructure. The National Needs Assessment was an important statement to highlight infrastructure investment priorities in the years ahead. That’s being picked up,” said Atkins UK and Europe chief executive Nick Roberts.
“We had a very good first half. We see profit and margin up in the UK and Europe on a stable revenue base and are seeing some of benefits from changes we’ve made. On relatively flat revenue of £450M, operating profits were up 32% on an 8.7% margin. It’s what we wanted it to be.”
In particular, Roberts said that in the UK the water market remains strong; however, Network Rail continues to “grapple” with CP5 and CP6, but this has been offset with other rail developments such as Crossrail, High Speed 2 and East West Rail.
While major projects provide an important pipeline, Roberts has been pleased with more local projects, such as the Leeds Station masterplan.
On the continued weakness of sterling, Roberts said: “The weakness of sterling has had a temporary benefit as we repatriate our profits from overseas into sterling. Clearly how that develops over time is uncertain, but there are not particularly any signals that a shift in this situation will occur in months ahead. It gives us an opportunity to sell British capability elsewhere.”