WS Atkins Plc (ATK.L), a provider of engineering and design consultancy services, Wednesday said it traded well through the fourth quarter and expects to report annual results slightly ahead of market expectations.
In an update on trading for the year ended March 31, the firm said the positive momentum in the UK business has been maintained. Headcount continued to grow and margin is expected to improve in the second half.
The company said it sees several future growth opportunities in the UK, including electrification of the rail network, airport development and aerospace.
WS Atkins said it is making progressing well to close out the disposal of the UK highways services business announced on February 28 and expects to incur exceptional transaction fees and restructuring costs of around 4 million pounds in this financial year as overhead base is aligned to reflect the removal of this business.
However, these costs will be more than offset by a profit on sale of around 15 million pounds that will be reported on completion of the transaction in the next financial year.
The North American consultancy business continues to experience softness, with an increasing requirement from clients to subcontract services, which dilutes reported margin. However, the firm still anticipates a better margin performance in the second half.
Due to additional costs in closing out its legacy contracts, Peter Brown, the construction management at risk business, is now expected to report a loss of around 6 million pounds for the year.
Financial performance in the Middle East has been impacted in terms of profitability and cash flow as negotiations continue on several outstanding contract variations. Asia Pacific and Europe maintained the strong first half performance in the second half also.
Looking ahead, the firm said, ''We have made good progress against our strategic priorities in the second half of this financial year. We will continue to vigorously pursue the implementation of our strategic objectives going forward.''
The company is slated to report its preliminary results on June 13.
The stock is up 3.5 percent at 918.50 pence in early morning trading.
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