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WSP reports steady progress in tough markets

Design and engineering consultancy WSP is performing as expected in difficult market conditions, it said today.

The firm, which reported in June that weaknesses in the public sector led to 400 job cuts and pre-tax profit dropping by nearly half, issued an Interim Management Statement for the period from 1 July 2011 to today.

The firm said:  “The group is performing in line with the board’s expectations in market conditions which generally remain challenging. 

“The trading patterns we have seen in our markets have not changed materially since we reported our half-year results in July although we are mindful that the increasingly uncertain macro-economic outlook impacts our clients both in the private and public sectors.”

The firm said it remains in a sound financial position with a £150 million committed credit line through to 2013, while also operating comfortably within its banking covenants. 

It added:  “Reflecting markets in which liquidity is tight, the management of working capital continues to present a challenge and remains a key area of focus.

“The sector and geographic diversification of WSP continues to help the group perform through today’s varied and difficult markets.  We remain focused on meeting these challenges and we are well positioned to benefit as markets and economies improve.”

The firm said at the start of the year that difficulties in its transport and infrastructure division was a primary reason for cutting UK staff and falling profit.

Andrew Thomas, support services analyst at Panmure Gordon, said pre-tax profit forecasts for the year remain unchanged at £30m. But Panmure reduced the 2012 pre-tax forecast by 10 per cent from £34.0m to £30.7m, after taking a “more prudent view” on the trading environment for the next 12 months.

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