Mistakes in the first three months of its fiscal year, combined with tough trading conditions, cost former chief executive Robin Southwell his position. Outgoing financial director Ric Piper, whose departure from the company shortly after the announcement had been planned, also found that his new position at Trinity Mirror had suddenly been withdrawn the day before he was due to join because of the problems at WS Atkins.
Bad market conditions had been compounded by problems with an update to systems for billing and payroll that occurred early in the year. WS Atkins said that the troubles would result in an increase in the company’s debt from £57m at the end of the last financial year on 31 March 2002 to £120m. The company is also expected to report an adjusted loss of around £5m before tax for the first half of the year.
The announcement, considered one of the most serious profit warnings in recent memory, sent shockwaves around the investor community and saw Atkins share price plummet.
WS Atkins said the ‘disappointing performance’ had been acknowledged and appropriate steps had been taken. It expects that its net debt will again be reduced by the end of the year. It has also embarked on a cost reduction programme that will result in the loss of up to 400 positions, which together with other measures is expected to save the company somewhere in the region of £15m.
This should result, according to the company, in figures for the second half of the year similar to those of last year, when the company achieved a profit figure of £15.2m before tax.
WS Atkins recently said there should be no further unexpected surprises in its results, but unfortunately for the company’s shareholders, the damage may already have been done.
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