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November 15, 2012 5:49 pm
WS Atkins provided a rare piece of good news in the UK industrials sector on Thursday when the design and engineering consultancy reported an uptick in staff numbers.
Investors interpreted the 2 per cent rise in headcount in the six months to October as a sign of confidence for an increase in work in 2013, and sent WS Atkins shares up 9 per cent to 696p.
The upbeat news came in contrast to recent profit warnings from industrials including GKN, Cookson and Morgan Crucible, all of which blamed increasing global macroeconomic uncertainty for cuts to their full-year guidance.
WS Atkins shares on Thursday recovered most of the losses they incurred last week, when profit warnings from building groups Balfour Beatty and Morgan Sindall sparked fears of further malaise in the construction sector.
“The sector and geographic spread of our business continues to provide resilience in challenging markets,” said Uwe Krueger, WS Atkins chief executive.
WS Atkins, whose engineering design expertise was used to ensure the gas flow to the flame at this year’s London Olympic Games, said its employee numbers grew 2 per cent to 17,800 in the six months to September 30.
The increase is a marked contrast to 18 months ago, when cuts to government funding for large building projects prompted the company to trim staff at its UK business.
WS Atkins, which is ranked as the largest engineering consultancy in the UK and derives about half its revenues from Britain, shed an additional 500 employees during the 2011 sale of its asset management arm.
“Encouragingly, the headcount is ticking up modestly (mostly in the UK and in energy) and work-in-hand is slightly ahead of this time last year.” said John Lawson, analyst at Investec.
The uptick in headcount came as the group reported a 14 per cent increase in first half pre-tax profit to £50.4m, buoyed by growth in the Asia-Pacific, Europe and the UK.
This offset weakness in North America and the Middle East, where the group’s divisions were hit by contract delays.
“The results also highlight a pick-up in the UK, where net recruitment points to improving trading, and an unchanged outlook for the full year for the group,” said Graham Brown at Canaccord.
In the six months to September 30, pre-tax profit rose from £44.2m, to £50.4m, from revenues down from £866.7m to £849.8m.
Diluted earnings per share rose from 34.8p to 41.8p, and an interim dividend of 10p was proposed, up from 9.75p last time.
Meanwhile, WS Atkins has been awarded a contract by the US Federal Emergency Management Agency to help with the clean up following Hurricane Sandy.
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