ATK.L Regulatory News (ATK)

Atkins outlook for the year unchanged

WS Atkins plc ("Atkins" or "the Group"), the design and engineering consultancy group, today provides its Interim Management Statement for the period from 1 April 2011 to date.

Performance

The Group has begun the year navigating well through challenging market conditions and the overall outlook for the year remains unchanged from that highlighted at the time of our final results in June 2011.

Our UK business operates in a number of well funded end markets although, as expected, the trading environment remains difficult. With added resilience brought to the UK business by its support for the Group's Middle East operations, we expect our overall headcount in the UK to stabilise broadly around current levels.

Following significant restructuring last year, our highways and transportation business has begun the year well with increased visibility of demand for our services. We have seen a modest increase in activity in the letting of new commissions, extensions to current contracts and the use of existing and new frameworks.

Our UK rail business operates in a competitive, but well funded, market. While there remain a significant number of opportunities for our engineering services, the timing of the awarding of major signalling contracts is likely to impact our second quarter workload. We remain confident that our excellent delivery record positions us well to secure our share of the next tranche of major signalling framework contracts when they are announced later this year.

Elsewhere in the UK, our water business continues to benefit from increased activity under the various AMP5 investment programmes, and we remain busy on work in connection with the London 2012 Olympic and Paralympic Games and the King Abdulaziz International Airport in Jeddah.

Our consultancy business in North America, which comprises the majority of our activity in the region, is progressing well as we implement our plans for improving profitability in what remains a slow market. However, our Peter Brown construction management at risk business has had a poor start to the year and this is expected to impact revenues and limit overall margin growth for our North American business as a whole this year.

The Middle East continues to offer significant opportunities in major infrastructure projects across the region, in particular in Saudi Arabia and Qatar. We have begun the year investing heavily in key personnel and bidding activity in a market with the potential for material growth.

The Group's Asia Pacific and Europe business is trading in line with our expectations, with continuing weak market conditions in both Ireland and Portugal, offset by growth in our architectural practice in Hong Kong.

Our Energy business is making good progress in its core markets of nuclear, oil and gas and power. We are very pleased with our acquisition of Pöyry's oil and gas engineering design and operational support businesses which was completed in the first quarter, and its integration into our broader oil and gas business is progressing well. The acquisition has strengthened the Group's position in the oil and gas support services sector with world class front-end design capability. As expected, significant investment activity is likely to affect operating margins, but the strong global energy market offers us good opportunities for growth through both skills addition and geographic expansion.

Financial position

The Group's financial position remains strong. As anticipated, higher working capital requirements in the first quarter, together with acquisition costs of £15 million in the period, have resulted in net funds of around £75 million at the end of June.

As expected, the reduction in the Group's IAS 19 pension deficit at 31 March 2011 will result in lower pension finance costs for the year.

Outlook

Our diversified exposure to a range of end markets and geographies provides us continued resilience in the face of challenging macroeconomic conditions.

Notwithstanding the challenges we face, the overall outlook for the Group remains unchanged since our final results announcement in June 2011.

Enquiries

Notes to editors

1. Atkins

Atkins (www.atkinsglobal.com) is one of the world's leading engineering and design consultancies*, employing some 17,500 people across the UK, North America, Middle East, Asia Pacific and Europe. It has the breadth and depth of expertise to plan, design and enable some of the world's most technically challenging and time critical infrastructure projects.

*It is the largest engineering consultancy in the UK (New Civil Engineer Consultants File 2011) and the 13th largest international design firm (Engineering News-Record 2011).

Atkins is the official engineering design services provider for the London 2012 Olympic and Paralympic Games.

2. Analyst Conference Call

A conference call for analysts will be held at 0800 hours today. Dial-in details are available from Alex Simmons, Smithfield +44 (0) 20 7903 0669.

3. Cautionary Statement

This information has been prepared for the shareholders of Atkins, as a whole, and its sole purpose and use is to assist shareholders to exercise their governance rights. Atkins and its directors and employees are not responsible for any other purpose or use or to any other person in relation to this announcement.

This release contains indications of likely future developments and other forward-looking statements that are subject to risk factors associated with, among other things, the economic and business circumstances occurring from time to time in the countries, sectors and business segments in which the Group operates. These and other factors could adversely affect the Group's results, strategy and prospects. Forward-looking statements involve risks, uncertainties and assumptions. They relate to events and/or depend on circumstances in the future which could cause actual results and outcomes to differ. No obligation is assumed to update any forward-looking statements, whether as a result of new information, future events or otherwise.