WSP enjoys 37% jump in pre-tax profit to £52m

WSP, the global consultancy group, has enjoyed a 37% climb in pre-tax profit to £52m.

Turnover has lifted by a similar amount and now stands at £760m.

WSP’s latest financial results cover the 12 months to 31 December 2008. Performance in the previous year saw turnover of £560m generate a profit of £38m.

Chairman David Turner said: “WSP has delivered an excellent trading and financial performance which was ahead of our expectations.

“In these challenging times, the momentum with which the Group has entered 2009, together with our overall order book and secure bank facilities provide a solid platform for the Group's trading outlook."

Segmental analysis of WSP’s performance shows:

Turnover

• £360m – property
• £200m – transport and infrastructure
• £100m – management and industrial
• £90m – environment and energy

Operating profit

• £28m – property
• £16m – transport and infrastructure
• £7m – management and industrial
• £7m – environment and energy

Turner commented: “We have had to contend with declining markets in the private sector of the UK and, to a lesser extent, the USA and Australia.

“Towards the end of the year, we witnessed an unprecedented slowdown in Dubai.

“In contrast, the public sector in the UK and the USA continues to grow and all our business activities in Sweden, Germany, South Africa and Asia are robust. 

“We have benefited from the introduction of new legislation driven by climate change and energy security.

“In the European Union, the introduction of the Energy Performance in Buildings Directive has been a key driver of growth and has more than compensated for the decline in transactional due diligence work.

“Further, we are well positioned to capitalise on market opportunities from the Carbon Reduction Commitment and other regulations that will be introduced as the world moves towards a lower carbon economy.”

Malcolm Paul, finance director since WSP floated in 1987, will leave on 6 May 2009.

At the end of the year WSP had over 10,000 employees

“We continue to recruit personnel in sectors where we have a growing presence, such as energy, sustainability, water, process engineering and rail,” said Turner.

However, there have been staff cuts in the private sector businesses and “it is likely that further cuts will take place”. In more detail, WSP’s global workforce was cut during 2008 by 5% at a one off cost of £3.5m.

Property

Contributes the largest portion of group revenue at 48%.

Transport & Infrastructure

Represents 26% of group revenues.  In the USA, WSP Sells which was acquired in 2007 has been a beneficiary of America’s enhanced infrastructure spending and has already built a strong order book going forward.

Management & Industrial

Following the acquisitions of CBP in Germany and the UK based CEL Engineering in the second half of 2007, WSP now report this additional core division.

The latest pre-tax profit figure of £52m is helped slightly by an exceptional contribution of £1m.

This itself is the result of a mixed bag of items, some positive others negative. Amongst this tally were:

• £2.7 charge for impairment of Charterhouse goodwill
• £1.2m charge for disposal of Biotherm
• £6.4m gain from sort-out of pension scheme in Sweden.

Explaining how any company can extract a £6m profit from its pension scheme in today’s charged environment for such schemes, WSP said: “In Sweden, from 2003 until April this year, a proportion of the multi-employer Government PRI scheme was treated as an unfunded defined benefit scheme.

“The group carried a proportion of its staff's pension liabilities on its balance sheet.

“This arrangement ceased in April when the employees were transferred back to the government scheme for future service. Future obligations of the group will now take the form of a defined contribution arrangement.”