LONDON (Alliance News) - WS Atkins PLC on Wednesday said trading has remained in line with expectations since the start of October despite some of its markets being tough.
"In the context of headwinds in certain markets, the group continues to trade in line with expectations. Our outlook for the full year remains unchanged as we make good progress towards our 8% Group operating margin target," said the company.
The design, engineering and project management consultancy firm said although it expects "little sector revenue growth" from its UK & Ireland division, that margins are expected to show "good progress".
In the third quarter ended December 31, WS Atkins secured a multi-year contract through its transportation business, its largest unit in the UK, for the East West Rail Phase 2 scheme as part of its alliance with Volker Rail, Laing O'Rourke and Network Rail. That contract is expected to deliver GBP100.0 million in revenue for WS Atkins over its lifespan.
The North American business is expected to show revenue growth in the second half of the year whilst margins also will improve, and WS Atkins said it has greater pipeline visibility moving forward.
WS Atkins said it remains cautious in the Middle East due to uncertainty as to the funding and timing of its pipeline opportunities, particularly in property and infrastructure, it said.
The company's performance in Asia Pacific was stable in the third quarter, as WS Atkins continues to branch out of China to mitigate the slowdown currently being experienced in the country.
The oil & gas division continues to be hampered by weaker market conditions and the performance remains "mixed". WS Atkins said its North American unit, which is more "capital expenditure exposed" has been particularly hit, but said this has been partly offset by growth in the Middle East.
WS Atkins said it expects to report net funds of around GBP190.0 million at the end of the full year due to end in March, and said its current revolving credit facility has been extended by one year to a new maturity date of January 2021.
"In the context of headwinds in certain markets, the group continues to trade in line with expectations and our outlook for the full year remains unchanged," said WS Atkins.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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