Numis leaves Atkins at 'buy' after trading update

Numis left WS Atkins at a ‘buy’ rating on Wednesday after the engineering company reported an in-line fourth quarter trading update.

Atkins said it traded well through the fourth quarter and expects underlying results for the year to the end of March to be in line with views.

The FTSE 250 group said its UK and Europe business is expected to show good margin progress in the second half as it continues to benefit from the UK government's ongoing commitment to infrastructure spending.

As far as North America is concerned, the business continues to operate within stable infrastructure markets.

Atkins said certain parts of its business with a greater reliance on federal funding still face project award delays, but it expects to deliver an improved second half performance after the first half was hit by bidding costs on major projects.

The firm said its financial position remains strong and it expects to report net funds of around £190m at 31 March, prior to the funding cost of the PP&T acquisition.

“Atkins's trading update notes a good fourth quarter, with full year results in line with management expectations,” Numis said.

“We do not expect any forecast changes either for full year 2016 or beyond based on this update. We continue to believe that the shares are very good longer term value.”

Numis gave Atkins a target price of 1,575. Shares were down 0.43% to 1,375p at 1054 BST.