Accounting for 16 per cent of revenues, WSP has one of the smallest exposures to the UK public sector of all its design and consultancy peers. Management of the engineering consultancy firm claim that a fifth of this figure is susceptible to funding cuts, while noting “early signs of a slowdown” in the public sector as projects continue to be deferred or cancelled. Trading in the private sector by contrast has been “materially better than a year ago,” chief executive Chris Cole points out, and operations in Sweden are continuing to display promise.
After benefiting from the fiscal stimulus last year, WSP's transport and infrastructure division struggled in the first half, reporting a £1.8m decline in profits. The shortfall was more than bridged the group's property division which has benefited from restructuring last year and delivered a 34 per cent rise in operating profits to £7.8m on revenues down 8 per cent to £158m. And though WSP's environment and energy division witnessed a 9.5 per cent fall in revenues, the plan is to take advantage of the drive towards renewable energy in the second half of the year.
Broker KBC Peel Hunt remains cautious given the limited near term visibility and expects full-year adjusted pre-tax profits to decline from £38.5m in 2009 to £34m, giving EPS of 36.5p (40.6p).
WSP (WSH) | ||||
|---|---|---|---|---|
| ORD PRICE: | 326p | MARKET VALUE: | £687m | |
| TOUCH: | 325-328p | 12-MONTH HIGH: | 374p | LOW: 233p |
| DIVIDEND YIELD: | 4.6% | PE RATIO: | 16 | |
| NET ASSET VALUE*: | 85p | NET DEBT: | 39% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 377 | 17.2 | 18.4 | 5.0 |
| 2010 | 354 | 17.0 | 18.1 | 5.0 |
| % change | -6 | -1 | -2 | - |
Ex-div: 8 Sep Payment: 8 Oct | ||||
