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Atkins boosts cash and expects flat UK revenue

A strong second half performance has seen Atkins revise its cash position up to guidance of around £180m, while it expects to report “flat” UK revenue in the year to 31 March, it said in a trading update today.

Ahead of its preliminary results announcement on 12 June, the firm said its UK business had performed well, but that revenue would be flat despite the disposal of its highways operation and maintenance business to Skanska for £18m.

However, it expects to show an improved UK operating margin as a result of the disposal, together with “ongoing benefits of our operational excellence programme”.

The design and engineering consultancy posted a UK operating profit of £56.6m (2012: £51.6m) on £900.3m of revenue (£859.9m), returning a 6.3 per cent margin for the year ending 31 March 2013.

The group increased its guidance for net cash at 31 March 2014 to around £180m after a strong second half performance. Analyst Liberum said it had raised the expected cash position from guidance of around £140m.

In an analyst note published after the trading update, Liberum said: “Around 5 per cent of UK sales are now AMP-related, and the transition to AMP6 is expected to be smoother than normal.

“We expect margin progress in H2 due to lower bid costs, an improvement in highways margins and progress in rail signalling.”

It predicted a 5 per cent increase in headcount for the year.

Atkins expects to report an increase in its year-end IAS19 pension deficit from that reported at 31 March 2013, with a consequent increase in the group’s pension interest charge in the year ending 31 March 2015.

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