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Middle East fuels profits rise for Atkins

Consultant Atkins today reported an increased profit margin on turnover that rose to £1.31bn for the year ended March 31 2008, up from £1.18bn the previous year.

Sustained growth of Atkins Middle East operations was credited as key factor in the success, which saw operating profit across the business rise to £86.7M at a margin of 6.6%, up from 5.7% the previous year.

"We are seeing substantial growth in the Middle East every six months," said Atkins chief executive Keith Clarke.

"We expect it to carry on that way, even without taking a view on oil at $100 per barrel. There is substantial growth in infrastructure planned in the region, all decisions made when oil was at the lower price of $70-80 per barrel."

Clarke added that the strong preliminary results, which were ahead of analysts' expectations, were a vindication of Atkins' focus on engineering and design.

"The results prove that being a proper engineering firm is a good business model," said Clarke.

"We produced the results we wanted to produce without pretending to be something we're not. We have not diversified, in fact we have done just the opposite by selling off Lambert Smith Hampton," he added, referring to the £46.5M sale of property agency Lambert Smith Hampton in June last year.

Clarke also defended the redundancies of UK design staff in four of the firm's regional offices.

"There is no future in carrying out very local work with low barriers to entry, especially given the fact that you face competition from local firms who, at the moment, will be struggling to get much work from the housing sector," he said.

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