Who said engineering was boring?

11th Dec '08 by Stocktaculous

8 comments 2614 reads

Plenty of background on this one in the Wiki but just flagging the solid set of interim results announced on November 26th for the six months to 30 September 2008....

Revenue grew 12% to £711 million, boosted by a 55 percent jump in the Middle East
Operating profit up 20% versus a year earlier to £48.2 million. Operating margin increase driven by improvements at its rail and management consulting divisions.
Pretax profit was also up at £47.5 million pounds from £42.7 million a year earlie
17% increase in the half-year dividend to 8.75p.
The group has £164m of cash as well so it is in a robust financial position.

The CEO, Keith Clarke said:

‘These are strong results. While we remain attuned to the wider economic situation, the range of our business and its strength in depth gives us continued confidence for the remainder of this year. Looking further ahead, our secure position allows us to continue to invest in Carbon Critical Design and our focus on excellence has positioned the group to respond with confidence to the challenges and opportunities ahead.

So, it looks to be holding up well and, if Gordon Brown plans to spend his way out of recession, WS Atkins should benefit as a key government supplier....

Unlock with Email

Unlock with Google

Already have an account?
Login here

Stocktaculous

11th Dec '08

87% of this year's revenue is secured but a key question is clearly resilience into 2009 given that contractors and builders are generally having a tough time in the UK especially. However, public sector infrastructure spending is continuing and the group's work is spread across so many countries and so many different sectors that it should be reasonably well-cushioned against recession. It also has some very long term projects - e.g. it is part of the consortium to widen the M25, a project that is expected to take up to ten years....

Analysts at Panmure Gordon liked the combination of increased profitability and higher staff levels....

"A 17 percent increase in the dividend reflects continuing confidence in prospects, while the diversity of offering and geographic spread provides relative defensive characteristics".

Numis pointed out that, while the engineering consultancy space has been unloved these last 12 months and underperformed significanty "Atkins scores well in these times when investors are looking for relative security."

Murakami

14th Dec '08

Yeah, the CEO seemed quite smug...

If the Government fulfils its economic plans we will find ourselves in a very robust market,' said Atkins chief executive Keith Clarke... But even if they fail we have found that in times of downturn there tends to be more consulting and planning work, getting better value for money, which also plays to us.

But don't forget that this business came horribly unstuck in 2002/03 and it is very exposed to infrastructure spending, which must be impacted eventually by the financing environment.

15th Dec '08

To their credit, at least they seem to have put the Metronet debacle behind them.

11th Feb '09

Latest results - cutting staff levels by 5%: http://www.stockopedia.com/news/announcement/ATK/090211atk1105n.htm

Despite the current worldwide economic uncertainty, the Group's financial position remains good with cash generation also in line with our expectations. Nevertheless, we have been affected by the uncertainty in a number of markets, principally in our Middle East and UK building design businesses. As a result, we anticipate that in the second half of this financial year staff numbers across the Group will reduce by some 5%. We will continue to monitor changes in the market environment going forward and make adjustments to staffing levels where appropriate.

28th Feb '09

UBS recently cut from to "sell" from "neutral", telling investors that the "downgrade cycle has just started.. Although the recent trading update said trading and cash generation for the year ended March 2009 was in line with expectations, Atkins' tone has become increasingly cautious. [The company] has been impacted by a slowdown in the Middle East (over 15 per cent of profits), and the UK building design businesses are facing pressures."

Oops, meant to continue bearish sentiment but hit the wrong button...

MrT

29th May '09

Strange to see the stock down today after good news re: Crossrail & the Atkins/Arup JV. Profit-taking maybe?

http://www.stockopedia.com/news/announcement/ATK/090529atk005864n.htm

Crossrail Ltd (CRL) has confirmed the appointment of an Arup/Atkins team to undertake one of the largest and most important elements of the Crossrail project - the detailed design of the major twin tunnels to be bored beneath Central London. In all there will be 42km of 6m diameter tunnel in two parallel bores along a 21km route running from Paddington through to the East of London. This will include a crossing beneath the Thames at Woolwich and interfaces with six major new underground stations. The tunnels will be constructed using Tunnel Boring Machines; one of the largest tunnelling projects in Europe at present.

Who said engineering was boring?

Unlock the rest of this article with a 14 day trial

About the Author

Stocktaculous

8 comments

Unlock the metrics for all these stocks and more...

Unlock the metrics for all these stocks and more...