If you are reading this on the London Underground today, spare a thought for
one of the members of the Metronet consortium, the people responsible for
upgrading two thirds of the capital’s tube network.
Design and engineering consultancy WS Atkins is set to reveal a very healthy
set of figures in the City today, with profits expected to be just shy of £70m.
This is good news for finance director Robert MacLeod. But its joint venture,
Metronet, has been in the firing line recently.
WS Atkins has seen a meteoric rise in its share price since 2002, seriously
out-performing both its own sector’s average and that of the FTSE All-Share
It has taken steps to clear its debt burden by selling off under-performing
assets and abandoned plans to diversify into facilities management and education
services. Instead, it is now focused on planning, designing and helping other
companies’ engineering projects via its design and engineering division.
What’s going to happen?
Back in April, MacLeod and chief executive Keith Clarke issued a trading
update indicating that the company anticipated full year results at the upper
end of expectations after ‘satisfactory’ trading in the second half.
The group said it has a strong order book and opportunities in all its
markets, which include rail, roads, design and engineering services, project
management and equity investments, adding: ‘The board believes the group is well
positioned to make further progress in 2006/07.’
Looking further forward, it also has been chosen as one of three first tier
consultants for the engineering and infrastructure development of the main park
for the London Olympics in 2012. At the same time it is about to embark on a
three-year, £65m contract with Network Rail for major re-signaling and
infrastructure upgrade work in and around Basingstoke in Hampshire.
But there could be problems ahead with the Underground. Earlier this month,
tube regulator Chirs Bolt was reported to have said the five companies that own
Metronet, including WS Atkins, could be forced to prop up the joint venture with
‘substantial’ sums to cover the rising costs of modernising the network.
Bolt said there was a ‘potential exposure’ for shareholders, while Metronet
itself blamed difficulties in agreeing the scope of station modernisations.
Which means only one thing – costly delays ahead.
WS Atkins: a home and away win
In April, Cambridgeshire County Council named Atkins as the preferred bidder
for a 10-year highway services contract. Worth up to £25 million a year, it
involves the integration of highway design services with the operation and
maintenance of Cambridgeshire’s road network.
Abroad, it has been appointed design programme manager for phase one of the
Dubai transit system.
Working for the Dubai Rapid Link consortium, Atkins will be lead consultant
for the phase, which includes 26 stations and 53km of viaducts and tunneling.
Does Darwin's theory apply to taxation? Colin ponders...
The EC has been instructed to draft a European Union (EU) directive authorising an EU financial transaction tax, which would apply to ten of the EU’s 28 member states
Accountancy watchdog the FRC has dropped its investigation into the former chief financial officer of Tesco, nearly two years after the supermarket was engulfed in an accounting scandal
Colin imagines how Apple's logo might change in the wake of the EC's ruling over its Irish tax arrangements