UK-headquartered global design, engineering and project management consultancy WS Atkins has reported a return to growth in its UK water and environment work with the publication this morning of its preliminary results for the year ended 31 March 2015.
At £134.1 million underlying operating profit rose 15.2% from £116.4m +on 2014, while underlying profit before tax was £121.9m, an increase of 14.6% over last year’s profit of £106.4m, on revenue that increased by 0.4% to £1.76bn (2014: £1.75bn). Atkins views underlying profit as a more representative measure of performance, removing the items that may give a distorted view of performance. The Group also reported an improved underlying margin of 7.6% (2014: 6.7%), making continued progress towards its 8% margin goal
The Group said its operational excellence programme is delivering efficiencies, particularly in North America. On 1st April 2015 Atkins reorganised its business in the UK in order to enhance its client focus, improve efficiency and drive business performance.
UK operations have now been reorganised and rationalised into four market facing divisions - the new structure is designed to maximise Atkins’ core technical skills and bring people together into new market, business development and project delivery teams to support competitive bidding and focus on delivering projects effectively. The reorganisation is expected to deliver year on year margin progress in a stable market.
Atkins’s United Kingdom and Europe business saw a much improved second half performance after a what it described as a mixed first half which included a market downturn in its aerospace business in the year and profitability affected by a number of contract variation negotiations in the UK rail business, which have now been largely resolved. Full year revenue decreased 9.5% to £903.8m, reflecting the sale of the highways services business in the last financial year and the Polish business in 2014 and difficult trading conditions in Scandinavia and Portugal.
In contrast, the highways and transportation and design and engineering businesses continued to benefit from the UK Government’s focus on infrastructure investment.
Secured work in hand in the United Kingdom and Europe is 45.3% (2014: 49.2%) of next year’s budgeted revenue.
Atkins’ UK water and environment business returned to growth during the second half of the year. This improved performance was due to increased volumes from AMP6 contracts secured with the water companies, including Thames Water and Severn Trent Water, for the 2015 to 2020 regulatory period.
The group has also bid successfully for similar collaborative opportunities with other water companies and secured frameworks with United Utilities, Southern Water and as one of two selected consultants for Wessex Water, giving confidence in continuity of workload for its water engineering team in AMP6.