LONDON (Alliance News) - WS Atkins PLC Thursday said its outlook remains positive despite challenging markets that are being affected by low oil prices and economic and political uncertainty, after it reported higher underlying profits for its last financial year.
The project designer, engineer and management consultancy reported a pretax profit of GBP106.7 million for the year to end-March, down from GBP114.2 million a year earlier, after the previous year was buoyed by a GBP10.5 million gain on a disposal and the last year was hit by a GBP4.4 million in external fees as it pursued an unsuccessful acquisition and a GBP2.8 million impairment on its 2007 acquisition of Dutch consultancy Atkins BV due to a downturn in the aerospace industry.
Its closely-watched adjusted pretax profit, which strips out those items, rose to GBP121.9 million, from GBP106.4 million, as revenue grew to GBP1.76 billion, from GBP1.75 billion, and its operating margin improved to 6.7% from 6.5%, towards its 8% target. The underlying profit figure was boosted by a GBP5.0 million research and development expenditure credit following early adoption of new rules in the UK, it said.
Currency movement knocked GBP22.8 million off its revenue and GBP1.1 million of pretax profit.
It raised its dividend for the year to 36.5 pence, from 33.75p.
WS Atkins reported a strong performance in the Middle East, Asia Pacific and in its energy business, said its North American performance is improving and a mixed performance in the UK and Europe.
"The group has maintained its resilience to challenging markets worldwide through the breadth and depth of its market positioning. 2015 continues to see a heightened level of uncertainty in world markets with the consensus of forecasts of world economic growth between 2.8% and 3.8% overall, but with significant regional variations. Sustained low oil prices and economic and political uncertainties provide a complex backdrop to near-term developments," the company said in its outlook statement.
"In the UK, we are encouraged by the continuing overall commitment by the recently elected Government to infrastructure and the National Infrastructure Plan and we believe our refreshed operating model positions us well to take full advantage of this. In North America, as our technical professional organisation matures, we expect productivity will continue to increase and help drive further margin improvement," it said.
"In Energy, we see a good pipeline of work across nuclear and renewable, balancing ongoing staff reductions in oil and gas. In the Middle East economies, the reduction in oil prices may have some near-term impacts on decision making and the launch of major capital spending commitments. However we believe essential infrastructure will remain a priority and the long-term objectives of governments in core markets are unlikely to be diverted significantly. Asia Pacific remains well placed to deliver on its strategic growth plan, helped by the acquisition of Confluence in 2013," it added.
WS Atkins shares were up 0.9% at 1,506.00 pence early Thursday.
By Steve McGrath; stevemcgrath@alliancenews.com; @stevemcgrath1
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