A DOWNTURN in the rail sector adversely affected profits at WS Atkins plc during the year to March 31. Trading operating profit at transport fell 9% to £21·3m, on turnover which was down 4% to £394·4m.
A fall-off in work in the second half of the year necessitated a reduction in overheads, but the company says its order book is substantial, with work in hand for 2006 at 70% of budgeted turnover. The company’s principal market remains the UK, and it also has operations in Scandinavia and the Far East. Atkins believes the slowdown in Britain will continue in the short term, but the rail market will be stronger in 2006-07.
Atkins has a 20% stake in London Underground PPP venture Metronet, where results currently ’largely reflect operating performance rather than the delivery of the capital programme’, which is at an early stage but has suffered significant delays.
According to Atkins Chairman Ed Wallis, these delays ’if not recovered, will affect the first [71/2 year] period’s returns’. Operating performance was ’broadly in line with expectation’, but Atkins has a £3m share in a provision of £14m made for the potential late delivery of station improvements.
