US to bounce back for Atkins after write-down

Faithful & Gould parent firm Atkins has written down the value of Hanscomb, the US based QS and project management firm it bought in 2002, by £5.5m.

The firm announced its move at its year-end results, released on Tuesday. It put the write down on the asset value of the business, which was bought for £19m, to “difficult market conditions which had a consequential effect on staff utilisation and margins.”

The move came despite plans announced by Faithful & Gould, Atkins’ main QS arm, to nearly double its workforce in the US over the next five years, revealed in QS News last week.

The Atkins statement did point to better future prospects in the States, with potential for client representation work and risk and programme management. It said: “Trading conditions in the US have shown some signs of improvement in recent months.”

F&G managing director Richard Hall, who visited the US last week, said that the firm was “through the worst of it” in America following the write-off. He said: “It’s not been great for construction in general. A lot of money has been diverted to Iraq and Afghanistan. But I’m quite upbeat about it now. We are winning excellent work over there.”

Atkins also said that F&G performed well in the UK, increasing profits significantly.

We have performed in a predictable way. We haven’t tried to chase turnover.

Keith Clarke, Atkins

The statement said that F&G had improved margins due to selective bidding and tight control of overheads. It said the firm was repositioning, “from the increasingly commoditised quantity surveying market to higher margin project management and strategic consultancy.” Examples of higher end work the division had won included work in the banking sector as well as consultancy for water client United Utilities and the Lea Valley regeneration project. It also pointed to current projects including commercial advice on the Amsterdam Metro and project and cost management for British Land’s regeneration scheme in Sheffield. Hall said the business was performing well in nearly all sectors except rail. He said: “Network Rail has slowed down the workload but I feel that the market will come back and it will come back stronger.”

Faithful & Gould forms part of the management and project services division of Atkins.

This division posted a small rise in turnover of £210.8m, an increase of £1.8m from the previous year. Trading operating profit proved more healthy, with a robust £6.6m being reported, an increase of £3m from the previous year.The group as a whole delivered solid results, with pre-tax profits £17m to £73.6m and turnover up £5m to £955m. Atkins chief executive Keith Clarke said he was satisfied with the group’s overall performance. He said: “We have performed in a predictable way.

We haven’t tried to chase turnover.” Clarke also said the group were looking to expand into China and the Middle East where there was plenty of potential, particularly in the pharmaceutical and petrochemical sectors.