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22 Reviews Operating and Financial Review Segmental performance Continued Highways and Transportation % change Key performance indicators 2008 2007 in year Financial metrics Revenue £274.6m £250.5m +10% Operating profit £16.8m £13.2m +27% Operating margin 6.1% 5.3% +0.8pp Share of post-tax JV profits £0.7m £0.6m +17% Work in hand 78% 77% +1.0pp People Staff numbers at 31 March 2,813 3,095 -9% Average staff numbers 3,054 3,067 -0% +27% Operating profit Revenue by client type Public Sector: Local Government Public Sector: National Government Private Sector Revenue by market Highway Services Design Intelligent Transport Systems Planning Revenue by size of job Contracts > £1m Contracts between £0.1m and £1m Contracts < £0.1m WS Atkins plc Annual Report 2008
Reviews 23 Our Highways and Transportation segment had a good year. Operating profit increased by £3.6m (27%) as margins grew to 6.1% (2007: 5.3%) due to the strong demand for our higher margin design activities. Staff numbers reduced by 9% primarily through the transfer of those previously engaged on the Highways Agency Area 10 and Northamptonshire County Council contracts, which both ended during the year, to new service providers. Our highway services business, which represents around two-thirds of this segment’s revenue, is engaged in operating, maintaining and improving highways and motorways on behalf of the Highways Agency and local authorities. The business performed well, benefiting from the first full-year’s revenue from the Cambridgeshire County Council contract won last year. This year also included the final year of the Northamptonshire contract which ended on 28 March 2008. During the year we were awarded the Area 6 MAC contract by the Highways Agency. This five-year contract, with an option to extend to a total of seven years, commenced on 1 June 2008. We are currently bidding for a number of further commissions including MAC contracts for the Highways Agency Areas 4 and 9. Our transport design business, which delivers all aspects of design of highway infrastructure and transport technology, performed well. During the year we completed the design of the widening of junctions 6A to 10 of the M1 and were awarded a number of projects for the Highways Agency including the detailed design for widening two lengths of the M27 and extensions to a number of other commissions. This year we also succeeded in securing major design commissions for the A14 in Cambridgeshire and the M74 in Scotland. Our intelligent transport systems group continues to grow as the market for technological solutions including ramp metering and traffic management information develops. In February 2008 we commenced a three-year contract to provide driver information, network management and operational services to Transport Scotland in their interim traffic control centre and we continue to work extensively with Traffic Wales. Our transport planning business, which provides a full range of strategic, policy, management, forecasting, business case and investment appraisals for infrastructure investment consultancy services, was augmented during the year by the acquisition and successful integration of the Intelligent Space Partnership. The business had a good year and our workload in road pricing through the Transport Innovation Fund, technical advice and research for central Government on strategic planning and policy, rail planning, and the delivery of local transport plans remained strong throughout the year. We provide high-level transport governance advice for the major metropolitan areas of the UK, and, on behalf of the Department for Transport, we developed the guidelines and assessment methodology for highway flood relief funding following the summer floods in 2007. In May 2008 the Connect Plus consortium, in which we are a member, was announced as the Highways Agency’s provisional preferred bidder for the 30-year M25 motorway widening Design Build Finance and Operate (DBFO) contract. Final confirmation of the contract would give Atkins responsibility for designing the works to increase the capacity of the M25. This design work should commence before financial close, which is expected to be late 2008 or early 2009, to enable the contract to start on site as soon as possible. As well as being a 10% shareholder in the Connect Plus joint venture company, our involvement will include a 32.5% share in the operation and maintenance joint venture responsible for the management of the entire M25 and a network of feeder roads including the tolling operations at the Dartford Crossing. Outlook The recent UK Government Comprehensive Spending Review indicated that transport expenditure would increase by 2.5% per annum up to 2019 with much of that increase in the early years. On that basis we would expect modest growth in the overall market but in the areas in which we operate, growth should be higher as the Government looks to deliver capacity and efficiency savings. We expect projects of national importance, such as the M25, M74, A1 and A14 to continue but other projects may slip, particularly where innovative technology solutions in which we have a deep and broad expertise (such as motorway access management) could be deployed. Our recent success gives us confidence that the outlook for the Highways and Transportation segment is strong, underpinned by our order book at 31 March increasing to 78% of budgeted revenue for 2008/09 (2007: 77%). Introduction Reviews Governance Financial Statements Investor Information WS Atkins plc Annual Report 2008
Page 1 and 2: WS Atkins plc Annual Report 2008 Pl
Page 3 and 4: Financial Highlights Introduction 0
Page 5 and 6: Introduction 03 North America 680 *
Page 7 and 8: Introduction 05 Revenue £374m £27
Page 9 and 10: Introduction 07 Results I am please
Page 11 and 12: Introduction 09 Atkins is a consult
Page 13 and 14: Introduction 11 Each business consi
Page 15 and 16: Reviews Reviews 14 Human Resources
Page 17 and 18: Reviews 15 +24% Increase in headcou
Page 19 and 20: Reviews 17 Reward We continue to mo
Page 21 and 22: Reviews 19 Key performance indicato
Page 23: Reviews 21 Design and Engineering S
Page 27 and 28: Reviews 25 The Rail segment perform
Page 29 and 30: Reviews 27 This year we have reorga
Page 31 and 32: Reviews 29 Europe As a whole, the E
Page 33 and 34: Reviews 31 The performance of the M
Page 35 and 36: Reviews 33 Asset Management had a g
Page 37 and 38: Reviews 35 £168.4m Net funds Net c
Page 39 and 40: Operating and Financial Review Prin
Page 41 and 42: Reviews 39 to be the driver if our
Page 43 and 44: Reviews 41 During the year our US o
Page 45 and 46: Governance Governance 44 Board of D
Page 47 and 48: Governance 45 James Morley Non-exec
Page 49 and 50: Governance 47 The final phase of im
Page 51 and 52: Governance 49 The directors confirm
Page 53 and 54: Governance 51 The directors of the
Page 55 and 56: Governance 53 A continuing professi
Page 57 and 58: Governance 55 The committee meets t
Page 59 and 60: Governance 57 The targets against w
Page 61 and 62: Governance 59 Audited information D
Page 63 and 64: Independent Auditors’ Report to t
Page 65 and 66: Financial Statements Financial Stat
Page 67 and 68: Consolidated and Parent Company Sta
Page 69 and 70: Financial Statements 67 Consolidate
Page 71 and 72: Financial Statements 69 Transaction
Page 73 and 74: Financial Statements 71 The results
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Financial Statements 73 Other recei
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Financial Statements 75 (c) Interpr
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Financial Statements 77 Derivative
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Financial Statements 79 Balance she
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Financial Statements 81 b) Investme
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Financial Statements 83 6. Employee
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Financial Statements 85 b) Factors
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Financial Statements 87 Metronet an
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Financial Statements 89 14. Goodwil
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Financial Statements 91 16. Other i
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Financial Statements 93 18. Investm
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Financial Statements 95 21. Invento
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Financial Statements 97 The carryin
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Financial Statements 99 29. Retirem
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Financial Statements 101 Atkins Rai
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Financial Statements 103 Movements
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Financial Statements 105 At 31 Marc
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Financial Statements 107 The effect
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Financial Statements 109 33. Statem
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Financial Statements 111 37. Operat
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Financial Statements 113 41. Subsid
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Financial Statements 115 Consolidat
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Investor Information Introduction R
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Notes Investor Information 119 Intr
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This Annual Report is printed by a
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