Design and engineering consultant WS Atkins cut average staff numbers 4 per cent in the period after revenues fell amid market conditions that remain challenging. Management says it will continue to flex its resources to meet market demand - which it may have to do if the UK economy remains sluggish.
For the moment, operations remain resilient with work in hand underpinning 90 per cent of full-year expected business, although uncertainty continues to cloud the timing of some of the contracted work. One of the group's strengths is its diversity, which ranges from urban planning in China to engineering design for the London 2012 Olympics. However, analysts at broker Evolution Securities point out that UK public sector net investment is forecast to fall 19 per cent on a compound basis between 2010 and 2014 under current government spending plans, which the broker describes as "arguably optimistic".
The group's operating margin edged up to 7.3 per cent and operating cash flow remains strong at £38m. However, the scale of the group's pension fund deficit remains a concern - that grew £86m to £302m, despite a substantial increase in underlying asset values.
Numis Securities expects full-year pre-tax profit of £90m (£100.2m in 2009), giving EPS of 69p (82.3p in 2009).
| WS ATKINS (ATK) | ||||
|---|---|---|---|---|
| ORD PRICE: | 608p | MARKET VALUE: | £609m | |
| TOUCH: | 608-609p | 12-MONTH HIGH: | 748p | LOW: 415p |
| DIVIDEND YIELD: | 4.4% | PE RATIO: | 7 | |
| NET ASSET VALUE: | * | NET FUNDS: | £231m | |
| Half-year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | 711 | 50.0 | 39.7 | 8.75 |
| 2009 | 701 | 43.5 | 34.8 | 9.25 |
| % change | -1 | -13 | -12 | +6 |
Ex-div: 16 Dec Payment: 29 Jan *Negative equity shareholders' funds | ||||
