As expected, weak demand from oil and gas clients dented first-half profit for energy consultancy RPS (RPS). The group's energy division - which provides consultancy services to oil and gas companies from bases in the US, UK and Canada - was forced to contend with a delay in project start-ups and reduction in client spend. This sliced 450 basis points off this division's margin, while profit was down 43 per cent. However, since national oil companies and governments have been less affected by the downturn than international companies, RPS has focused on work within this client base.
It was a different story for the group's built and natural environment (BNE) business in Europe. The business provides consultancy services to the property and infrastructure development and management sectors. Fee income grew by almost a quarter to £106m, while its margin improved 50 basis points from the year-end to 13.4 per cent, both at constant currency (CER). In February the group acquired Norwegian project management and training consultancy Metier.
The North American BNE business has significant exposure to the energy infrastructure market and has been held back by delayed project expenditure in the sector. Nevertheless, segmental CER profit grew by almost a fifth to £5.3m. With its February acquisition of Texas-based consultancy Klotz, management plans to diversify the business into more traditional planning, development and environmental consultancy.
Broker Numis Securities expects adjusted EPS of 19.9p for the full year, down from 21.9p in 2014.
RPS (RPS) | ||||
|---|---|---|---|---|
| ORD PRICE: | 223p | MARKET VALUE: | £495m | |
| TOUCH: | 222-223p | 12-MONTH HIGH: | 295p | LOW: 182p |
| DIVIDEND YIELD: | 4.1% | PE RATIO: | 16 | |
| NET ASSET VALUE: | 169p* | NET DEBT: | 19% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 279 | 21.7 | 7.0 | 4.05 |
| 2015 | 284 | 17.9 | 6.0 | 4.66 |
| % change | +2 | -18 | -14 | +15 |
Ex-div: 17 Sep Payment: 15 Oct *Includes intangible assets of £420m, or 189p a share | ||||
