WS Atkins on Wednesday gave investors a glimpse into its full-year performance to March, with a trading update detailing results “anticipated to be towards the top end of current market expectations”.
The engineering consultancy gave few financial details but positive statements relating to its Middle East and rail business in particular gave a 25p lift to its shares to £10.65.
Robert MacLeod, finance director, said conditions remained good for the group. “Capital plans haven’t changed much in the UK despite current conditions, we’re pretty confident we can keep growing here.”
Market expectations for pre-tax profit are in the £88m ($174m) to £92m range, rising to about £100m for the next 12 months.
One blot on the statement was the pension plan, which is now £215m in deficit, up slightly on revised assumptions about longevity and assumed investment returns from its portfolio.
As part of a recovery plan, Atkins made contributions to the fund of £37.5m in the year to March, supplemented by £12.5m on April 1. It is committed to a further £32m of funding a year until 2014.
The statement also detailed profits that were lower than expected from its management consultancy business and lower margins due to integration costs of acquisitions. But most analysts raised their forecasts, focusing on strong growth in the Middle East, where Atkins has added 700 workers to its business.
The company also updated markets on its £100m planned share buy-back, the first in its history, revealing that £34.9m of shares had been bought.
Hector Forsyth at Evolution Securities said Wednesday’s statement would cause him to raise his £89m pre-tax profit estimate. “Atkins has the right exposure of infrastructure and public sector in the UK, and a high-growth Middle East business,” he said.