From its high-calibre projects - the likes of the Bahrain World Trade Center and Hoover Dam Bypass - to its solid financials, everything about engineering consultancy Atkins (ATK) shouts quality. As one would expect of such a quality outfit, the group is an excellent cash generator. Atkins clocked up £95.5m operating cash flow last year and that was after pumping £32m into the company's pension plan. Net funds rose by almost a third during the year.
That solid performance has not come about by accident. Atkins is just over halfway through a big strategic push to sharpen its focus on those end markets that offer the best potential and, in the process, improve its growth and margin prospects. Businesses that didn't fit the mould have been ejected: construction management arm Peter Brown and UK highways services businesses were disposed during the year.
Three of the five divisions - energy, Middle East and Asia Pacific - hit the group's 8 per cent operating margin target last year. Moreover, management tells us they see no reason why the UK and North American divisions shouldn't follow suit.
Broker Peel Hunt expects adjusted EPS of 91.9p this year (2013-14: 85.7p), rising to 98.9p next year.
| WS ATKINS (ATK) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,313p | MARKET VALUE: | £1.3bn | |
| TOUCH: | 1,312-1,315p | 12-MONTH HIGH: | 1,511p | LOW: 858p |
| DIVIDEND YIELD: | 2.6% | PE RATIO: | 13 | |
| NET ASSET VALUE: | 130p* | NET CASH: | £188m | |
| Year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | 1.39 | 97 | 80 | 27.5 |
| 2011 | 1.56 | 91 | 74 | 29 |
| 2012 | 1.71 | 136 | 109 | 30.5 |
| 2013 | 1.71 | 98 | 87 | 32 |
| 2014 | 1.75 | 114 | 98 | 33.75 |
| % change | +2 | +16 | +13 | +5 |
Ex-div: 9 Jul Payment: 22 Aug *Includes intangible assets of £239m, or 239p a share | ||||
