Scott Wilson pre-tax profit halves to £9m

Scott Wilson, the consultancy group, made a £9.4m pre-tax profit last year which is less than half the figure of £20m in the previous year.

The latest accounts cover the 12 months to 3 May 2009.

Turnover of £350m was ahead of the previous figure of £310m.

Geoff French, chairman, said: “The second half of the year has seen a challenging trading environment for Scott Wilson.

“We have downsized our business to match capacity. One-off redundancy costs have impacted our full-year performance.

“However, demand for infrastructure services around the world remains robust, especially in growth regions such as China and India where Scott Wilson has a strong reputation and presence.”

Shareholders would be happy to hear that the total dividend for the year of 4p represents an increase of 11% over the 2008 figure.

Redundancies apart, SW had 6,400 staff at the end of April, similar to the figure at April

Hugh Blackwood, chief executive, said: “The demand for global infrastructure remains strong as urbanisation continues around the world.

“The UK remains a leading global provider of engineering consultancy services and Scott Wilson's technical and industry credentials are very strong. The Group is already well established in both China and India, two major markets that continue to grow despite the recent economic difficulties.”

Segmental analysis – turnover

• £110m – UK South
• £100m – International
• £72m – UK Central
• £44m – UK Railways
• £39m – Scotland and Ireland

Segmental analysis – operating profit

• £8m – UK Central
• £2m – Scotland and Ireland
• £530,000 – International
• £230,000 – UK Railways
• £2,000 – UK South

UK & Ireland Divisions

UK Central

Recent fiscal stimulus by the government to infrastructure projects in the UK has benefited the division - £1bn of construction activity involving the group in an engineering design role was accelerated following the government’s statement in November 2008.

These projects include the M1 motorway junctions 10 to 13 and the A46 Trunk Road dualling in Nottingham and Lincolnshire. In addition, the A421 dualling project from Bedford to the M1 has reached construction stage and been committed to site.

The Area 7 MAC, in which SW has a 40% share progressed well during the year and has also been the recipient of renewed government spending.

UK South

The second half saw a rapid deterioration, largely as a result of the banking crisis. A number of projects were deferred, postponed or cancelled.

Blackwood said: “The division reacted early to the developing situation but we then saw a sudden end to the development bubble in the Middle East and, despite statements to the contrary, the health and education sectors in the UK have been extremely disappointing as secured projects continue to be deferred and delayed.

“The combination of these circumstances has resulted in the need to restructure the building & infrastructure sector element of the division by reducing total sector staff by around 20%.”

International Division

A 43% increase in turnover to £100m.

Provision has been made for emerging bad debts, particularly in the Middle East. 

Blackwood said: “Our Indian regional business has continued to grow by 29%. The government is continuing with its major spend on infrastructure and any changes from elections this year are not expected to compromise long term projects; the slump in the private property sector is having very little effect on our Indian business.

“There is a similar story in Eastern Europe with substantial growth in revenue.”