WS Atkins (ATK) spent the summer trying to buy Parsons Brinckerhoff, the consulting arm of embattled construction group Balfour Beatty (BBY), but was outbid by its Canadian rival WSP Global. That cost it £4.4m in professional fees, thereby depressing reported profits. But the infrastructure group's underlying performance has been decent, with adjusted pre-tax profit up nearly 5 per cent to £46.9m despite a £2.7m currency hit.
The growth came mainly from North America and Asia. Atkins sold off a loss-making US subsidiary last year, which reduced revenues but helped boost half-year profit by more than a fifth. Conversely, the Asia Pacific business was buoyed by the acquisition of Confluence, a Singapore-based project management business, even as business in mainland China slowed.
The only region firing on all cylinders was the Middle East, where profit more than doubled to £8.9m thanks to work on rail, infrastructure and property projects across the Gulf states. In July, for example, Atkins was appointed lead designer on the new gold line of the Doha metro in Qatar.
The much larger UK business fared less well: strip out the effect of a disposal and sales were down about 4 per cent. Key client Airbus dialled down its design work on some projects, prompting Atkins to redeploy manpower to growth businesses such as defence and energy.
Broker Investec Securities expects adjusted EPS of 92p this year, up from 86p in 2013-14.
WS ATKINS (ATK) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,362p | MARKET VALUE: | £1.4bn | |
| TOUCH: | 1,362-1,364p | 12-MONTH HIGH: | 1,505p | LOW: 1,236p |
| DIVIDEND YIELD: | 2.5% | PE RATIO: | 17 | |
| NET ASSET VALUE: | 157p* | NET CASH: | £155m | |
| Half-year to 30 Sept | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 915 | 54.8 | 48.4 | 10.5 |
| 2014 | 831 | 39.0 | 31.8 | 11.0 |
| % change | -9 | -29 | -34 | +5 |
Ex-div: 4 Dec Payment: 9 Jan *Includes intangible assets of £247m, or 247p a share | ||||
