Atkins’ preliminary results for the year ended 31 March 2011 show revenue up 12% to £1,564.3m from £1,387.9m last year. Most of that increase is accounted for by the acquisition of PBSJ in the USA last October.
Operating profit of £107m was down 5.3% on last year’s £113.0m, making a deterioration in operating margin from 8.1% to 6.8%.
Pre-tax profit of £91.0m was 5.8% down on last year’s £96.6m, but underlying operating profit - excluding transaction expenses of £8.0m and intangible amortisation of £3.7m relating to the PBSJ acquisition - was up 7.5% to £118.7m.
Chairman Allan Cook and chief executive Keith Clarke were pleased with the results: “This was a transformational year for the group, in which we proved our strategy is working. We balanced our geographic footprint with a North American acquisition and continued to maintain our focus on quality and agility. We are now well positioned for growth and our outlook for the current year is unchanged.”
Worldwide staff numbers were up 12.3% from 15,600 on 31 March 2010 to 17,522 on 31 March 2011, due mainly to the acquisition of the North American based consultancy PBSJ, which employed 3,500. This puts the net headcount reduction in the region of 1500, or slightly more when other smaller acquisitions are factored in.
In the UK, revenues were down 6% to £926.5m (2010: £983.5m) and operating profit was down 20.6% to £61.4m (2010: £77.3m).
UK staff numbers were reduced 7% during the year to 9,640 at year end.
“Overall our UK business performed in line with our expectations, successfully navigating difficult market conditions.”
Highways work has taken a hit from central and local government spending cuts, having been buoyed by fiscal stimulus work the previous year. Divisions working on the Olympics, rail and water were all kept busy, however.
“The outlook for the UK is stable. We have a solid, diversified platform to navigate short term market challenges and a breadth of quality expertise that will help us exploit opportunities when growth returns in the medium term. We have good positions in some well-funded markets. Work in hand is broadly consistent with the same time last year and we enter the new financial year with confidence in our ability to navigate what remains a difficult market. Further, our depth and breadth of expertise in the UK is essential to supporting projects in a number of our overseas businesses.”
In North America, six months trading from PBSJ, acquired on 1 October 2010, brought a five-fold rise in turnover from £55.0m to £279.2m. However, the profitability of the business was impacted, with operating margin down from 6.2% to 4.9%.
Staff numbers in the USA rose during the year from 510 to 3,336. Shedding a net c.700 from the two businesses was facilitated by combining back office services.
The Middle East business had a good year, with revenue up 3.1% to £140.9m and operating profit up 70% to £23.8m – a margin of 16.9%.
However, much of this reflects the recovery of a number of long outstanding debts, although the underlying operating margin of the business remained above 10%.
Staff numbers were cut 16.7% across the seven Middle East offices, from 1,867 to 1,555.
Other, smaller, acquisitions during the year were Danish bridge engineering company Gimsing & Madsen in November and Technical Services Scotland (TSS) consultancy from RWE npower's Bellshill Technical Services Group in March 2011.
On 3 June 2011 Atkins also acquired the oil and gas competence line of Pöyry plc for £15.4m.
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