Consultant WSP has suffered a sharp drop in profits, despite shedding 1,000 jobs and a boost in revenue.
Half-yearly results, published today, show that revenue grew from £363.5M over the six months to 30 June 2008 to £376.9M over the same period this year.
Operating profit fell by 41.4%, from £31.4M over the first six months of last year, to £18.4M over the same period this year.
WSP’s chief executive Chris Cole said: “The diversification of our business across many sectors and regions has enabled the Group to deliver sound financial results in a difficult business climate.
“The Group is well financed and we believe that its diversification and reputation, together with its experienced, talented and committed workforce, means we are well placed to trade through the current economic environment and to take advantage when the market improves,” he said.
Business in the Middle East remains tough, according to the trading statement, with problems remaining in collecting debt there. “Net debt at 30 June amounted to £75.1M (June 2008: £77.5m) which increased from £56.2M at December 2008 as a consequence of the natural seasonality within our business and a slowdown in collections from the Middle East and private sector clients more generally. The Group is well financed with a £150M committed credit line to 2013 and is operating comfortably within its banking covenants.
“There are still many issues to resolve following the liquidity crisis which severely affected activity in Dubai in late 2008. Whilst we are working hard to address these, the timing and impact of their resolution remains uncertain.
“We are however seeing a high level of bidding activity in the wider Middle East and North Africa region with some significant project wins and whilst these remain competitive and can be slow to progress we see our expansion in the region continuing,” it reads.
Of WSP’s four sectors, three reported a slip in revenue this year, with only transportation and infrastructure reporting a rise.
The property sector saw a drop of 5%, to £172M this year from £180.2M over the same period last year. The Middle Eastern property sector reported a loss of 7.3% for its business this year, while the UK business saw a 27% fall in revenue.
Transport and infrastructure saw strong performance - revenue up 29% from £89.9M last year to £115.8M this year.
Environment and Energy saw a drop in revenue of 6%, from £46.5M last year, to £43.6M this year.
Management & Industrial saw a drop in revenue of 3%, from £46.9M last year £45.5M this year.
Shares in WSP fell slightly on the news, dropping around 1.5% to 241p in early trading.