ATK.L Regulatory News (ATK)

Pre-Close Trading Update

WS Atkins plc ("Atkins" or the "Group"), the design, engineering and project and programme management consultancy, today provides an update on trading for the year ended 31 March 2015 in advance of its preliminary results announcement on 11 June 2015.

The Group has continued to trade well through the fourth quarter, with very good cash flow generation, and we expect to report underlying results for the year ended 31 March 2015 in line with expectations.

United Kingdom and Europe

Overall, the performance of our UK business has improved in the second half, against a mixed first half. We are pleased to have reached resolution on the contract variation negotiations in our rail business which, as previously indicated, impacted positively on our regional cash performance for the period. We have successfully completed the transition to our new UK operating structure, centred around four market facing business units, with implementation effective from 1 April. Looking forward, while we may see a certain hiatus on decision making due to the general election, we are encouraged by the bipartisan commitment to continued infrastructure spend.

North America

The streamlined organisational structure in our North American business is starting to deliver improved productivity, which we expect will contribute to a year on year margin improvement in our consultancy business. We see good growth opportunities for our five client-facing business units as we enter the new financial year.

Middle East

As anticipated, our Middle East business has delivered a good second half performance, driven primarily by significant rail and metro projects. Looking forward, we continue to see a good pipeline of work across our focus sectors of rail, infrastructure and property.

Asia Pacific

Our Hong Kong and mainland China businesses have traded in line with our expectations through the period. The slowdown in mainland China, as previously reported, is now expected to continue into the new financial year.

Energy

Our oil and gas, nuclear and power businesses have performed well in the second half and our two recent acquisitions, Nuclear Safety Associates and Houston Offshore Engineering, are integrating well, establishing a nuclear footprint in North America and adding specialist offshore floating platform capability respectively. We continue to monitor the trading environment closely given the impact of a lower oil price on our clients' spending levels and we will proactively adjust our resources to reflect anticipated activity levels.

Balance sheet

The Group's financial position remains strong and, following an excellent cash performance in the last quarter, we have raised our expectations for net funds at 31 March 2015 to around £175m.

Other matters

The Group is proposing to 'early adopt' the new RDEC (research and development expenditure credit) regime in the UK for the 31 March 2014 and 2015 financial years. This regime permits R&D credits to be recognised above the line rather than as an incentive delivered entirely via tax relief. For the year ended 31 March 2015, the impact is expected to result in an increase in our reported profit before tax of around £5m and an increase in our effective tax rate of around 2%. Looking forward to the year ending 31 March 2016, we expect our reported profit before tax to increase also by around £5m.

We are pleased to announce the appointment of Numis Securities Ltd ("Numis") as the Group's joint corporate broker with immediate effect. Numis will work alongside our existing broker and financial advisor, JP Morgan Cazenove, and financial advisor, Moelis.

Outlook

Aside from the RDEC changes referred to above, our overall outlook for the year ended 31 March 2015 remains unchanged and we are confident of taking further steps towards the achievement of our strategic goals in the next financial year.

Ends

Enquiries

1. Notes to editors

Atkins (www.atkinsglobal.com) is one of the world's most respected design, engineering and project management consultancies, employing some 18,000 people across the UK, North America, Middle East, Asia Pacific and Europe. We build long term trusted partnerships to create a world where lives are enriched through the implementation of our ideas. You can view Atkins' recent projects on our website.

2. Analyst Conference Call

A conference call for analysts will be held at 0800 hours today. Dial-in details are available on +44 (0) 207 121 2693.

3. Cautionary statement

This announcement 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. In particular, this announcement has not been audited or otherwise independently verified and no warranty is given as to its accuracy or completeness (other than any such warranty which is mandatorily implied by statute). 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 and their responsibility to shareholders shall be limited to that which is imposed by statute.

This announcement 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 materially from those currently expected. No obligation is assumed to update any forward looking statements, whether as a result of new information, future events or otherwise.