Atkins sees Scottish energy business as key as public spending cuts bite

WS ATKINS, the design and engineering consultancy working on the London Olympics, is bolstering its energy division in Scotland as public spending cuts lead to job losses elsewhere.

The company revealed yesterday that it has scaled back its UK operation as government contracts dried up, but its workforce north of the Border has nearly doubled as it concentrated on energy projects for the offshore wind and oil & gas industries.

Expansion in the US and the Middle East helped the firm report a 7.5 per cent rise in underlying operating profits, to 118.7 million, in the year to 31 March.

But in the UK, which accounts for nearly two thirds of the Epsom-based firm's revenues, profits fell 20 per cent, prompting the company to cut 750 jobs, or 7.2 per cent of its workforce.

The firm said its highways and transportation business suffered after fiscal stimulus packages that buoyed the market in the previous year disappeared.

"Delays and cancellations of schemes for the Highways Agency and tightening of local authority and central government budgets significantly impacted the business and led to a reduction in headcount," it said.

It hinted at further cuts to come, noting that growth in the UK "will be difficult in the near term and therefore our focus remains on managing headcount to meet the anticipated market demand for our services."

But Martin Grant, head of Atkins' energy business, which has a presence in Glasgow and Aberdeen, said the company was also looking to growth industries such as renewable energy to fill the gap. He said the firm had gained about 80 Scottish employees through acquisitions such as the recent takeover of Finnish oil and gas firm Poyry, and had been transferring its own staff from its beleaguered transport division.

The company now has about 200 staff north of the Border.

Grant said: "The team in Scotland has grown substantially over the last year or so. We continue to recruit a lot of graduates from Scottish universities."

Atkins recently completed a feasibility study for the proposed electrification of the Edinburgh to Glasgow rail line and associated routes, part of the early work on the 1 billion Edinburgh Glasgow Improvement Programme (EGIP).

It has also worked with Scottish company Burntisland Fabrications on wind turbine foundations, and worked on a project to bring broadband to the Western Isles.

Globally, the firm grew its revenues by 12.7 per cent, to 1.56 billion, although that includes a contribution of 228m from its new US acquisition, PBSJ.

In the Middle East, operating profits jumped 70 per cent to 23.8m during a "very good year" for the division.Atkins' board is recommending a final dividend of 19.5p, taking the total dividend for the year to 29p, an increase of 5.5 per cent on the year before.