Pre-tax profit slip to £60m but underlying performance remains strong thanks to performance of design and engineering arm.
Atkins has reported a 3% slip in pre-tax profit to £60m for the year ended 31 March 2005. Atkins said increased contributions to its pension fund were largely to blame for the fall.
A fall in rail spending and significant delays in the capital programme at the Tube joint venture Metronet had a negative affect on results. The multidisciplinary consultant also had to make provision for future losses on a number of facilities management contracts, although its Design and Engineering Services and Management and Project divisions had a strong year.
The company said that adjusted pre-tax profit, which doesn’t include the pensions contribution and other exceptional items, increased by 30% to £73.6m. Turnover for the support services remained stable at £955m.
The group said the outlook for its core markets were positive and said that it had already received orders amounting to 57% of budgeted turnover for 2006.
Atkins said that the slowdown in the rail sector would continue in the short-term and said that it had cut overheads in response. In the medium term it was more optimistic because of forecasts predicting higher spending on renewals and enhancements. Turnover fell from £410.3m to £394.4m in the sector and operation profit tumbled 9% to £21.3m.
Atkins said its joint venture Metronet made a provision of £14m for the financial impact off the potential late delivery of station improvements, of which Atkins’ share is £3m.
Its Design and Engineering Solutions division had a more successful year. Turnover increased 9% to £288.4m and operating profit leapt 82% to £24.5m. Atkins said that education and healthcare would provide growth in the coming year. It also noted that the Middle East and China would continue to provide growth opportunities.
Atkins made a contribution of £8.6m to its pension fund in addition to the £3.5m already committed. To make up its pension deficit the group said that it anticipated making future contributions of £10m per annum.