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WSP eyes takeover to expand abroad

WSP PLANS to boost its overseas workload from 10% to 25% of turnover by taking over a major British consultant with an international order book in the next 16 months.

The move will take WSP into the top 10 British consulting firms.

Managing director Chris Cole told NCE this week that the acquisitive consultant was actively planning another purchase as large as its 1997 takeover of Graham (NCE 13 March 1997).

That acquisition boosted staff numbers from 890 to 1,250. With the total now around 1,600, a similar move would bring the stockmarket-listed consultant alongside firms like Babtie and Gibb.

Cole said: 'We plan to get 25% of our turnover from overseas by 2000. Merger or acquisition is the only way to meet this target.' WSP currently earns just 10% of its turnover abroad.

Asked if he had any firms in his sights, Cole commented only that he was looking for a UK firm with a significant overseas workload. On the timing of any deal he said: 'It usually takes us six months to put together that sort of deal. You'll definitely see something happen by 1999.'

WSP, which announced its interim results this week, is arguably the consultancy success story of the 1990s. Currently listed in the NCE Consultants File as the 18th largest firm, it was in 51st place with just 275 staff in 1993 and began the decade outside the top 100.

WSP's interim figures for the first six months of 1998 are the first to show a full contribution from Graham. Turnover was up 58% to pounds32.5M, and pre-tax profit up 55% at pounds2.3M when compared to the first half of 1997.

Relatively smaller interest and dividend payments mean that it has retained pounds1.1M of profit, an 83% increase.

Cole said the money would be used to invest in resourcing the business: 'We are currently spending pounds2M a year on IT. We're also putting in the sort of infrastructure that you need to support 1,500 people.' Restruct- uring of the business in the wake of the Graham takeover also has another four months or so to run.

WSP remains predominately a building engineering firm, but the shape of the business is changing significantly.

Turnover from building projects was up 42% at pounds18.5M, with operating profits climbing 37% to pounds1.8M. However, civils turnover has shot up 75% to pounds9.3M, while profits have more than doubled to pounds400,000. Cole said he intended to raise civils margins to 5% and building margins to 10% by the end of year.

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