Atkins Avoids Olympic Indigestion

LONDON -- Despite being "the official engineering design services provider of the London 2012 Games," WS Atkins (ISE: ATK.L) seems to have successfully avoided the Olympic-inspired troubles that have afflicted Hornby (ISE: HRN.L) and G4S (ISE: GFS.L) . And now that the summer fun is complete, Atkins has commenced work on the much-discussed legacy infrastructure.

In fact, Atkins seems to be doing much better in the U.K. than it is elsewhere around the world. North America is experiencing weak market conditions and further cost cutting, and is the subject of a more detailed analyst presentation today, while the Middle East has seen "project delays and lengthy contract variation negotiations."

Asia Pacific and Europe are said to be doing OK, with Scandinavia called out for special praise. Energy is another growth area, and said to be mainly responsible for the increase in headcount from 17,420 at the end of March to 17,700 now.

Overall, Atkins said its profit outlook was unchanged from the statement issued at the start of August, which contained a mild profit warning and saw the shares drop 9% in one day. The share price has recovered a little bit since, and now stands at 690 pence, valuing the company at a whisker under £700 million.

On a forward price-to-earnings ratio of nine, and yielding around 4.6%, Atkins doesn't look expensive right now, but it has found profit growth hard to come by in the last five years, even though its sales have grown from £1.3 billion to £1.7 billion.

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