Latest:
Profit slumps at WS Atkins
16:34 31 Jul 2002
|
by John Leitch
WS Atkins, the integrated support services group, has revealed a pre-tax profit of £21m, down 33% on the previous year's figure, now re-stated at £31m. Turnover (12 months to 31 March 2002) rose 20% to £810m.
The result was a slide in Atkins' overall operating margin from 4.8% to 3.4%.
Profits were hit by the high level of London Underground PPP bid costs (Atkins has a 20% stake in the Metronet consortium), the £50m cost of setting up a Shared Services Facility in Worcester, and a no-holds-barred review of ongoing operations by new chief executive Robin Southwell.
"I've addressed operational issues forcefully," said Southwell last week, "and we've taken high PFI bid costs on the chin. Margins will go up in future years."
With the City nervous over the way some companies in the services sector - and Amey in particular - have distanced PFI bid costs from their annual profit figures, Southwell was keen to position Atkins at "the safe end of the spectrum".
"There has been little effect of UITF 34 [the new accounting standard] on the results. To compare us with someone else would be inappropriate. We've always been prudent," said Southwell.
Two exceptionals had a major downward influence on Atkins' pre-tax profit: £8.9m of PFI bid costs and a £6.1m restructuring charge. A pension credit of £3.4m eased these problems somewhat.
In the transport division, operating margins eased to 4%, partly as a result of the group's £3.8m contribution to Metronet's bid costs. Financial close for the London Underground PPP is expected this autumn. In highways, Atkins is responsible for the management and maintenance of more than a quarter of the UK's trunk road and motorway network.
Turnover in the highways division was up 19% at £224m, with operating profit running to £9m.
Atkins' government services division called for the most remedial action, turnover of £205m generating a loss of £900,000. Southwell has grasped the nettle here: finding 10 local government contracts to be unprofitable, he has terminated three and re-negotiated one.
Atkins is the preferred bidder for the Colchester Garrison PFI and has been for almost four years. "It's a hardy perennial," said Southwell. The good news is that there has been progress on two of the underlying issues: footpaths and archeological digs. Atkins' bid cost for the Colchester project runs to £2m.
WS Atkins, the integrated support services group, has revealed a pre-tax profit of £21m, down 33% on the previous year's figure, now re-stated at £31m. Turnover (12 months to 31 March 2002) rose 20% to £810m.
The result was a slide in Atkins' overall operating margin from 4.8% to 3.4%.
Profits were hit by the high level of London Underground PPP bid costs (Atkins has a 20% stake in the Metronet consortium), the £50m cost of setting up a Shared Services Facility in Worcester, and a no-holds-barred review of ongoing operations by new chief executive Robin Southwell.
"I've addressed operational issues forcefully," said Southwell last week, "and we've taken high PFI bid costs on the chin. Margins will go up in future years."
ADVERTISEMENT
With the City nervous over the way some companies in the services sector - and Amey in particular - have distanced PFI bid costs from their annual profit figures, Southwell was keen to position Atkins at "the safe end of the spectrum".
"There has been little effect of UITF 34 [the new accounting standard] on the results. To compare us with someone else would be inappropriate. We've always been prudent," said Southwell.
Two exceptionals had a major downward influence on Atkins' pre-tax profit: £8.9m of PFI bid costs and a £6.1m restructuring charge. A pension credit of £3.4m eased these problems somewhat.
In the transport division, operating margins eased to 4%, partly as a result of the group's £3.8m contribution to Metronet's bid costs. Financial close for the London Underground PPP is expected this autumn. In highways, Atkins is responsible for the management and maintenance of more than a quarter of the UK's trunk road and motorway network.
Turnover in the highways division was up 19% at £224m, with operating profit running to £9m.
Atkins' government services division called for the most remedial action, turnover of £205m generating a loss of £900,000. Southwell has grasped the nettle here: finding 10 local government contracts to be unprofitable, he has terminated three and re-negotiated one.
Atkins is the preferred bidder for the Colchester Garrison PFI and has been for almost four years. "It's a hardy perennial," said Southwell. The good news is that there has been progress on two of the underlying issues: footpaths and archeological digs. Atkins' bid cost for the Colchester project runs to £2m.
ADVERTISEMENT
Most Viewed Articles
ADVERTISEMENT