Investment Column: Atkins finds road to privatised profit
Friday 12 June 1998
For a company with this spread of business, Atkins is not that large. Yesterday it reported pre-tax profits of pounds 30.5m on turnover of pounds 365.8m. Nevertheless, it has a terrific growth record - operating profits have quadrupled in the past five years.
This should continue. Atkins has a strong position in outsourcing in the rail and road industries, making it well placed to profit from any boost to spending on transport. It should also benefit from the opening up of similar markets in continental Europe and the Far East, where it already earns a fifth of its revenues.
Property services has recently been more static but Atkins is confident it can expand its private facilities management work while also building private finance hospitals and schools.
The key to Atkins' success, however, will be whether it can win new business while also lifting margins. Return on sales hit a record 5.8 per cent last year but chief executive Michael Jeffries says margins should be more than 6 per cent. The other challenge is to expand internationally. Hence Atkins is ditching its archaic regional structure in favour of three UK divisions: property, transportation and industry, before extending the format abroad. The company also has a pounds 50m cash pile to fund acquisitions.
Atkins' shares have had a tremendous run, more than doubling in value since they were floated two years ago. But on a multiple of 25 times forecast earnings the shares, which rose 4.5p to 555p yesterday, are still cheap for a business with Atkins' growth potential. Buy.
- 1 Double chins could be 'cured' without surgery or dieting using new injection
- 2 The BBC has just done more to eradicate ‘terrorism’ than all our wars since 9/11
- 3 Dog thinks owner is drowning in lake, dives in and tries to pull him out
- 4 Christian blogger says she will not wear leggings in public because they entice men and cause them to look at her 'lustfully'
- 5 Thank heavens for Louise Mensch and her foul-mouthed tweets to world leaders
Scientists discover way to unboil an egg – and the results are not as pointless as that sounds
Saudi preacher who 'raped and tortured' his five -year-old daughter to death is released after paying 'blood money'
Greece elections: Greek PM Alexis Tsipras takes aim at 'neo-liberal' Europe as country gears up for prolonged austerity battle
Auschwitz liberation 70th anniversary: Woman sent to three Nazi death camps describes surviving gas chamber
Chilling drone footage captures Auschwitz ahead of 70th anniversary of liberation
'We would evict Queen from Buckingham Palace and allocate her council house,' say Greens
French court convicts three over homophobic tweets, in case hailed as a 'significant victory' by LGBT rights campaigners
Greece elections: Syriza and EU on collision course after election win for left-wing party
British Muslim school children suffering a backlash of abuse following Paris attacks
Islamic history is full of free thinkers - but recent attempts to suppress critical thought are verging on the absurd
British grandmother Lindsay Sandiford faces execution by firing squad in Indonesia
iJobs Money & Business
£16500 - £16640 per annum: Recruitment Genius: This fast growing Finance compa...
£30000 - £32000 per annum + benefits : Ashdown Group: A highly successful, int...
£18000 - £20000 per annum: Recruitment Genius: This rapidly expanding business...
£25 - 28k + Bonus: Guru Careers: An In-house / Internal Recruiter is needed to...