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Atkins vision blurred by PFI hopes

APPARENTLY, W S Atkinss in-house newspaper is being vetted by lawyers these days to ensure nothing appears which might compromise the firms plans to join the stock market later this year.

Such are the lengths companies feel obliged to go to in the pursuit of financial correctness.

But it appears that Atkins has dusted off its plans to go public, which were shelved with the outbreak of the Gulf War. It has a merchant bank, Schroders, and reports have appeared that it is planning a float next summer on the back of strong figures for 1995/96.

Ostensibly, Atkins offers a promising prospect. Last year the firm made 21 million profit on sales of 196 million, and it has evolved beyond consulting into construction and project managment. The talk now is of a stock market value of 200 million, suggesting profits moved ahead quite smartly in the current year.

Like the Scottish contractor Morrison which went public last year Atkins is also likely to stress its bright prospects under the Private Finance Initiative (PFI).

Atkins was also part of the consortium which won the privately financed prison at Bridgend and is now keen to look at other PFI projects. It will have been encouraged by the near certainty that Ove Arups consortium is set to win the Channel Tunnel Rail Link.

Obviously, Atkins will not want to draw parallels with the construction- related practices which have gone public so far such as DY Davies, YRM and Whinney Mackay-Lewis which have mostly been stock market disasters. It may prefer to point to WSP, a rival consulting engineer, which is publicly quoted and whose shares have fared reasonably.

But Atkins is a larger beast and its results have been flattered in recent years, possibly by one-off gains from reviving acquisitions particularly the building management business it bought from the Property Services Agency in 1993. Fee competition in Atkins core business of providing consultancy remains tight.

The City may also have reservations about the strategic direction of top consulting engineers, which seem to be intruding increasingly on contractors markets. The PFI has made the traditional separation of roles in the industry less clear but it is not obvious who the winners will be.

Bill Fishlock