Atkins remains stable despite some trading headwinds

WS Atkins continued to trade in line with expectations in the three months from 1 October 2015, the company's fiscal third quarter, despite difficulties in some markets.

According to a trading update issued on Wednesday, the FTSE 100 design, engineering and project management consultant's outlook for the full year remained unchanged, and it was making good progress towards its 8% group operating margin target.

In the UK and European market, Atkins said it was encouraged by the British Government's autumn statement in October, underpinning its commitment to infrastructure spend in the UK.

Its transportation business - Atkins' largest in the UK - remained active, and during the period secured the East West Rail Phase 2 scheme as part of its alliance with Volker Rail, Laing O'Rourke and the infrastructure authority Network Rail.

"This multi-year contract is expected to deliver up to £100m of revenue for the group over its life", the Atkins board confirmed.

The company's North American operation was expected to show second half revenue growth year-on-year, while in the Middle East Atkins was continuing its work on the Riyadh Metro and two lines of the Doha Metro programme, as well as managing the Central Planning Office in Qatar.

Atkins described its performance in Asia Pacific as stable during the period, despite the slowdown in mainland China, which it expected to continue through the next financial year.

In energy, the company said performance in its oil and gas business was mixed, with a further deterioration in trading conditions - particularly in its capital expenditure-exposed North American operations.

"The group's financial position remains strong. We expect to report net funds of around £190m at 31 March, excluding the funding of our Projects, Products and Technology acquisition", the company's board said in a statement.

It was referring to the acquisition of EnergySolutions, which Atkins was currently progressing regulatory clearance for, and expected to complete early in the new financial year.

"In the context of headwinds in certain markets, the group continues to trade in line with expectations and our outlook for the full year remains unchanged", the board concluded.