WS Atkins Share Discussion Threads

[tonyleongson] 22/12/2004 14:52

Tipped in IC

22 December 2004

WS ATKINS (ATK)

689p - engineering consultant - Atkins has made a good
recovery since a disastrous profit warning back in
October 2002 pushed the group to the brink of
bankruptcy and claimed management scalps. This hasn't
gone unnoticed in the City and Atkins' shares have
risen twelvefold since then.

So, with the urgent problems now resolved, the group's
priority now is to rebuild profit margins. So far,
it's been successful - they have surged. From 4.5 per
cent a year ago, the operating margin on continuing
operations has now hit 5.8 per cent. This is in line
with what Atkins managed before 2002's profit warning.
This margin recovery has come as the group has
rationalised its portfolio of contracts and has cut
costs on loss-making ones. Management is also being
more choosy about the work it is taking on.

Atkins' finance director, Robert MacLeod, says there's
further margin growth to come, but he won't be drawn
as to how much. City analysts expect the group to be
making margins of over 6 per cent next year and,
within two years, the margin could top 7 per cent.

Meanwhile, work should keep pouring in as the markets
that the group operates in are strong. For one thing,
the construction sector is buoyant. This is important
for Atkins, as many of its services are
construction-related, such as architecture. Other
areas of importance, such as transport infrastructure
spending, are also growing strongly. Spending on UK
road and rail renewals and upgrades is forecast to
grow from current levels of around £6bn a year to over
£7bn a year by the end of the decade.

In the group's first-half results, issued earlier this
month, the only disappointment was that Atkins'
business with London Underground isn't performing as
well as had been hoped. Although the Metronet joint
venture, in which Atkins is an investor, is performing
well - first-half profits rose £1.8m to £5.5m - extra
work hasn't come through as hoped.

Under the deal's structure, Atkins is supposed to
provide extra services, such as station
modernisations. But it has taken longer than expected
for this work to appear. Consequently, profits from
such activities slumped from £2.5m in the first half
of last year to £300,000 this year. However, the work
hasn't disappeared forever - London Underground's
tatty stations must be improved eventually, so this
blip should be made good.

Atkins also has a balance sheet stuffed with cash -
£76m at the end of September - and the ability to
generate lots more. After nearly going bust a couple
of years back, when debts rose above £100m, such
strong cash generation is a healthy development.

In fact, cash generation is so strong that the group's
management seems to be struggling to know what to do
with it. While some acquisitions look likely, as
Atkins wants to offer more services to its clients,
such deals will not be big. Instead, management will
use the group's funds to hike the dividend. It was
doubled in the first half to 4p and further strong
growth seems likely. Cash is also plugging the pension
deficit, which currently stands at an ugly £69m.

We have twice recommended buying shares in Atkins - in
August 2003 and then in January this year. However,
the picture is different now from the way it looked
back then. Atkins is no longer a business in recovery
mode. It's now in a growth phase with no sign that the
pace is letting up. Yet the shares still look
inexpensive, trading on 15 times underlying earnings
for the year to next March, and around 13 times for
the year to March 2006.

Given the group's impressive performance so far, we
think it is only right to recommend buying Atkins'
shares once again. Buy.

[lafiamma] 14/12/2004 20:35

oh good, it's not all blue, thought there was something wrong with my monitor...

laf ;o)

[lafiamma] 14/12/2004 20:34

testing.....

[tonyleongson] 08/12/2004 07:34

Director Buy
RNS Number:1434G
Atkins (WS) PLC
07 December 2004

SCHEDULE 11

NOTIFICATION OF INTERESTS OF DIRECTORS AND CONNECTED PERSONS

1. Name of company

WS Atkins plc

2. Name of director

Keith Edward Frank Clarke

3. Please state whether notification indicates that it is in respect of holding
of the shareholder named in 2 above or in respect of a non-beneficial interest
or in the case of an individual holder if it is a holding of that person's
spouse or children under the age of 18 or in respect of a non-beneficial
interest

Director named in 2 above and spouse

4. Name of the registered holder(s) and, if more than one holder, the number of
shares held by each of them (if notified)

Halifax Share Dealing Limited

5. Please state whether notification relates to a person(s) connected with the
director named in 2 above and identify the connected person(s)

Joint holding between director named in 2 above and spouse

6. Please state the nature of the transaction. For PEP transactions please
indicate whether general/single co PEP and if discretionary/non discretionary

Purchase

7. Number of shares / amount of stock acquired

7,000

8. Percentage of issued class (any treasury shares held by the company
should not be taken into account when calculating percentage)

0.01%

9. Number of shares/amount of stock disposed

Nil

10. Percentage of issued class (any treasury shares held by the company
should not be taken into account when calculating percentage)

N/A

11. Class of security

Ordinary 0.5p shares

12. Price per share

684p

13. Date of transaction

6 December 2004

14. Date company informed

7 December 2004

15. Total holding following this notification

26,500

16. Total percentage holding of issued class following this notification (any
treasury shares held by the company should not be taken into account
when calculating percentage)

0.03%

If a director has been granted options by the company please complete
the following boxes.

17. Date of grant

N/A

18. Period during which or date on which exercisable

N/A

19. Total amount paid (if any) for grant of the option

N/A

20. Description of shares or debentures involved: class, number

N/A

21. Exercise price (if fixed at time of grant) or indication that price is to be
fixed at time of exercise

N/A

22. Total number of shares or debentures over which options held following
this notification

N/A

23. Any additional information

N/A

24. Name of contact and telephone number for queries

Richard Webster 01372 752349

25. Name and signature of authorised company official responsible for making
this notification

Richard Webster

[tonyleongson] 02/12/2004 18:57

Scotland leads way for Atkins profits

JOHN BOWKER
SENIOR CITY CORRESPONDENT


WS ATKINS cheered a strong performance in Scotland yesterday as the company posted a set of bumper profits and a doubled dividend payment.

The engineer consultancy, which works on roads, rail, schools and defence contracts among a range of public sector activities, said half-year profits had jumped 50 per cent to £26.6 million. The rise came on the back of a surge in government work as the firm took advantage of controversial PFI and PPP schemes across the UK.

In Scotland, the firm advises all 15 regional NHS boards on future developments, while it was also part of the consortium that won a £100m contract to build 20 new primary schools in South Lanarkshire.

Senior director Alan Griffiths said: "We usually cross the fence on these deals and work on the public side of things. We help make sure the projects are good value for the tax-payer."

Contracts in Edinburgh include a deal with the city council to assess the Scott Monument - a move that could lead to another restoration of the 19th-century tower.

And on Clydeside, the firm is completing work on the £40m Glasgow bridge with partner Richard Rogers. Griffiths described the structure as "spectacular".

He added: "In my 20 years or so at the company, Scotland has always grown year on year. We now have 400 employees north of the Border."

His distanced himself from disgraced government contractors such as Jarvis, noting that, on the consultancy side, the industry is less competitive. "Contract wins are less about money," he explained.

The six-month performance helped the company pay a 4p interim dividend to shareholders - double the levels of last year.

The company posted turnover up 6 per cent at £544m, while its order book currently stands at £1.8 billion. This amounts to 90 per cent of the full-year budget.

South of the Border, Atkins is working on the project to upgrade the west coast main line - the rail route co-run by Stagecoach.

Griffiths was unusually upbeat about the future of the UK's creaking network, claiming he had confidence in the new funding programme in place for Network Rail. "It's not just about new assets, it's also about upgrades," he said.

Atkins has also been developing the case for congestion charging in Bristol, a project that could put the city in line to be the first outside London to get congestion charging.

There was good news for Atkins' pensioners, as the company said that its strong cash flow position would allow it to step up payments to the company's pension schemes. It will now pay £10m a year, up from the £4.3m agreed a year ago.

Around 2,700 of the company's 14,000 strong workforce work outside the UK, with a major hub set up in Dubai. Atkins worked on Berj al Arab - the world's only seven-star hotel.

Atkins shares, which have outperformed the sector by 57 per cent this year, were down 2.5 per cent or 18p to 687p.

[tonyleongson] 02/12/2004 18:56

Atkins rejects 'easy money' claims

Terry Macalister
Thursday December 2, 2004
The Guardian

WS Atkins has hit back at accusations that PFI companies are making easy money by selling off their equity stakes.

Chief executive Keith Clarke said it was "impossible to understand" the logic that said it was all right to own stakes in PFI deals but not to sell them on for whatever value they could obtain.

It was right, he believed, for the private sector to be able to make decent returns on a scheme given "a lot of people have lost their shirts when they got things wrong".

Atkins has already sold off some of its equity stakes such as a road holding to Balfour Beatty and more would follow.

Mr Clarke's comments came after the National Audit Office said it would be looking at the secondary market in PFI stakes. That move followed criticism that windfall profits were being made which should be shared with the public sector.

He was speaking as his company showed off the extent of its financial rehabilitation with a 50% increase in first half profits and a bullish outlook statement on the future.

The country's largest engineering consultancy and a stakeholder in the Metronet firm that controls part of London Underground through a public private partnership deal, reported interim pre-tax profits of £26.6m.

The advance came - along with a doubling of the dividend to 4.0p - despite only a 6% increase in turnover to £544m.

Mr Clarke joined Atkins a year ago from Skanska AB after a period when the British firm had run into IT and other problems that led to it running a 2002 annual loss of £45.3m.

Atkins shares have outperformed its sector by 57% but they ended down 18p last night at 687p. Analysts all praised the strong first half financial performance but were split over whether the shares were now overvalued.

Jane Sparrow at Panmure Gordon reduced Atkins from "buy" to "hold" saying margin that growth had been achieved and topline growth was not due to kick in for 12 months.

But Atkins' outgoing chairman Michael Jeffries said: "The state of our order book and our quicker than expected improvement in margins gives us confidence for the rest of the year."

[tonyleongson] 02/12/2004 18:55

WS Atkins attacks Government over Tube
By Michael Harrison, Business Editor
02 December 2004

One of the lead contractors involved in the part-privatisation of London Underground launched an attack yesterday on the lack of joined-up thinking within the Government.

Keith Clarke, the chief executive of WS Atkins, which has a 20 per cent stake in the Metronet consortium, said there was a disconnect between ministerial pronouncements and action on the ground. "Announcements are made and nothing happens. The gap between policy and implementation is wide and widening," he said. Mr Clarke refused to be drawn on specific examples but said he was thinking in part about Public-Private Partnerships (PPP) such as the deal to hand over the Tube system to private contractors and the Private Finance Initiative (PFI).

Atkins is one of the biggest players in the privatised rail and road sectors and relies on the Government or regulated industries such as the utilities for 70 per cent of its £1bn turnover. The company is involved in advising the Government on road pricing and is also a big subcontractor to Network Rail, the state-backed operator of the rail system.

Atkins increased pre-tax profits in the first half of the year by 50 per cent to £26.6m, thanks partly to the contribution from Metronet, which has taken over two-thirds of the London Underground. It made a £5.5m profit on its stake in the consortium, suggesting that Metronet overall will have made a £27.5m profit in the first six months of the year.

But profits from work carried out for Metronet slipped from £2.5m in the previous year to £300,000 due to delays in the capital investment programme. The company is investing some £7.5bn in the London Underground over a seven-and-a-half-year period. Mr Clarke defended the PPP for the Tube by saying the Underground would have been in "terminal decline" by now had the private sector not been able to step in. Metronet is responsible for the sub-surface lines, including the District and Circle, and a number of deep Tube lines, including the Bakerloo, Victoria and Central.

Turnover for the period was flat at £463m but margins rose sharply in its non-transport divisions, enabling Atkins to double the interim dividend to 4p.

The chairmanship of the company will pass to Ed Wallis, a former chairman of Powergen, when Michael Jeffries retires in January.

[tonyleongson] 02/12/2004 18:52

Resist taking profits at Atkins

WS Atkins, the consulting engineer, has suffered some uncomfortable associations in the past couple of years. After a disastrous profits warning in 2002 the shares collapsed by more than 90pc to a low of 52p and Atkins found itself mentioned in the same breath as those PFI black sheep - Amey and Jarvis.

Amey was crippled by aggressive accounting and Jarvis, still limping on, by aggressive pricing. Atkins, though, was a different animal. Since their 52p low in Autumn 2002, Atkins' shares have recovered to 687p - down 18 after yesterday's half-year results. Unlike Amey and Jarvis, its problems had nothing to do with business practices but with the troubled implementation of a systems upgrade. The inevitable management clear out cleared the way for some fresh ideas and the company is now sitting on £76m of cash, a £1.8 billion order book and rapidly improving profit margins.

Turnover is declining but chief executive Keith Clarke is more interested in margins and the bottom line, which means focusing on more attractive contracts. That attention is paying off. First half pre-tax profits climbed 50pc to £26.6m as margins improved from 4.5pc to 5.8pc. "Top line growth will follow," Mr Clarke said.

With the Government committed to billions of pounds of infrastructure spending until 2010 and 70pc of Atkins' business in the public sector, there is still ample room for the anticipated growth. Added to which, its 20pc stake in the Metronet tube consortium should soon start generating the promised returns. Atkins is no longer a cheap stock but followers of Questor will have enjoyed the ride. We tipped it at 287½p and again at 458p. Tempting as it may seem, investors should resist taking profits. Trading on 15 times forecast earnings with a 1.5pc prospective yield, there is still some long-term upside.

[tonyleongson] 02/12/2004 12:34

BROKER RECOMMENDATIONS


ABN reiterates add WS Atkins

[indecision] 01/12/2004 22:08

I wish that i had one of those clocks!

[tonyleongson] 01/12/2004 21:43

There is something with the date/clock on this website.

[indecision] 01/12/2004 21:22

tonyleongson,
How did you manage to post the results on 30th November at 16.10pm? 690 of 700

[tonyleongson] 01/12/2004 17:45

LONDON (AFX) - Corporate services group WS Atkins PLC said it is doubling its interim dividend to 4 pence a share as it unveiled a rise in pretax profit to 26.6 mln stg for the six months to Sept 30 from 17.8 mln a year earlier.

Excluding exceptionals and goodwill, pretax profit from continuing operations
rose 14.6 mln stg to 34 mln in the first half.

Turnover from continuing operations excluding joint ventures was broadly flat at 463.4 mln stg compared with 462.0 mln a year earlier but turnover from
continuing joint ventures rose to 80.8 mln from 52.4 mln.

There was a sharp improvement in operating margins to 5.8 pct from 4.5 pct,
which the company put down to being more selective about contracts.

"Following on from recent progress we expect to continue with our strategy of
being selective in our approach to new contracts and migrating to higher margin
activities," said outgoing chairman Michael Jeffries. "The state of our order
book and our quicker than expected improvement in margins gives us confidence
for the rest of the year."

The group was upbeat on its prospects for the year, saying its order books are
strong, with 90 pct of its budgeted full year turnover already having been
achieved in the first half.

Jeffries added: "Whilst overall turnover growth is expected to be modest next
year, the prospects in all our core markets are good, especially in the UK where the government has committed to major investment to improve public sector
infrastructure."

Jeffries will be replaced as chairman on Jan 1 by Ed Wallis, former chairman and CEO of Powergen PLC, who joined the board as a non-executive director on Sept 8.

[tonyleongson] 01/12/2004 17:43

fail to stop Atkins surge
Steve Hawkes, Evening Standard
1 December 2004

WS ATKINS has seen profits from its stake in the Metronet consortium running two-thirds of the London Underground surge in the past half-year despite delays in work to modernise stations.

The engineering consultant bagged £4.5m from Metronet in the six months to 30 September, up 13% on a year ago and contributing a major chunk of Atkins' total pre-tax profits for the first half - £34m.

The jump is likely to spark more fury from rail unions critical of the public-private partnership on the Tube, as well as passengers angry over the state of the network.

Just three months ago Metronet was blamed for the White City derailment earlier this year. Atkins chief executive Keith Clarke said that despite a wave of negative headlines, Metronet was achieving results, not least in reliability on the Central line and the renewal of 8,000 metres of track.

He conceded the amount of work faced by Metronet had meant delays in starting work on improving 'station ambience' but added that nearly 40 new such projects would soon be under way.

Clarke said: 'Without this work, the Tube would be in terminal decline.'

Atkins' interim profits of £34m were up 43% on a year ago. Turnover rose just £1.4m to £463.4m but operating margins improved from 4.5% to 5.8%.

The group is doubling the dividend* to 4p and upping contributions to its pension plan by £10m a year.

[whoseyourdaddy] 01/12/2004 10:26

expect a healthy rise in the next couple of days...

[slogsweep] 01/12/2004 10:02

£1/2 mill sell just gone through without disturbing the price so institutions probably mopping up at this price

[slogsweep] 01/12/2004 09:18

Over last month or so rate of increase in share price up from long term 46% to 123% PE of 15 rates this more like a construction company than a consultancy so may be there is a slow rerating going on. Still like it as a good steady long term hold

Fall in share price after results irrespective of good or bad news is such a feature of the market nowadays I'm surprised the arbitraguers havn't moved in to even it out.