By Graham Ruddick www.telegraph.co.uk
Shares in the UK engineering consultant, which worked on the Burj Khalifa tower in Dubai, rose 6pc on Wednesday after it said a pick-up in the Middle East meant profits in the year to March 31, 2011, should beat expectations.
Keith Clarke, chief executive, said Atkins is working on the Etihad railway, Jeddah airport and is bidding for a Qatari rail contract. It has also recovered £5m of unpaid debts.
“There is a huge amount of infrastructure work,” he said, pointing to Abu Dhabi, Qatar and Saudi Arabia. “We always said the return of liquidity would be a long and steady progress in the area. It has returned as a different economy – moving from constructing buildings that will eventually be filled to investing in infrastructure.”
Atkins makes 10pc of its revenues in the Middle East, with 30pc from the US and roughly 54pc from the UK.
Mr Clarke said the UK business is performing in line with expectations after public spending cuts. The company has trimmed its workforce by 1,000 to 17,500 over the past six months to help deal with the downturn in work, although this includes synergies from the integration of the PBSJ Corporation in the US.
Atkins is advising London 2012 organisers on the construction of temporary venues for the Olympics, and Mr Clarke said there are also opportunities in the energy and rail sectors, such as Crossrail.
The company is decommissioning and maintaining Britain’s current nuclear plants, but Mr Clarke played down the potential impact of the UK delaying new nuclear power plants following the Japanese earthquake.
“I think all around world there will be more studying done, which is appropriate,” he said. “Frankly, this is good for us, because we are consultants, we don’t build them.”
Shares in Atkins rose 38½ to 727p following the update. Analysts at Numis upgraded their forecasts for pre-tax profits from £93m to £98m, which compares to £96.6m last year. Mr Clarke added: “With our focused portfolio of businesses across a number of geographic markets, the group is well placed for the year ahead.”