Company News

UPDATE 1-WS Atkins's strong profits seen smoothing takeover completion

(Adds details, analyst comment, share movement)

June 15 (Reuters) - British engineering and design consultancy WS Atkins reported its fastest growth in annual profit in at least a decade on Thursday, which could help smooth completion of its takeover by Canadian rival SNC-Lavalin Group.

Atkins, which agreed in April to be acquired by SNC for C$3.6 billion ($2.7 bln), said a strong performance at its North American business helped lift its underlying pretax profit by 18 percent in the year through March to 164.6 million pounds ($209.7 million). Revenue rose 12 percent to 2.08 billion pounds.

The results beat analysts’ expectations for an annual pretax profit of 158.03 million pounds on revenue of 2.07 billion pounds, according to Thomson Reuters I/B/E/S estimates.

SNC-Lavalin, which agreed to buy Atkins at a price of 2,080 pence per share, said last month it would not raise its offer for Atkins unless it faces a rival bid.

In April, U.S. activist investor Elliott Capital Advisors disclosed it had taken a 6.8 percent stake in Atkins.

Analysts said the strong results justified SNC’s offer price and should smooth the takeover process.

“A gate-crasher to the deal now seems increasingly unlikely,” Liberum analyst Joe Brent said.

“We expect the deal to close prior to the long stop date of 31st July 2017,” he added.

Atkins, which serves companies including BP and Network Rail, said revenue in North America rose 32.5 percent during the financial year, helped by new transport projects.

The company had earlier expressed optimism over its outlook, saying it should benefit from plans by U.S. President Donald Trump to boost infrastructure spending.

Shares in WS Atkins have risen 33 percent since the election of Trump last November. They were largely unchanged at 2,073 pence by 0810 GMT on Thursday.

The company said its Middle East and energy markets, which have proved to be its weak spots in the first half of the year, performed in line with market expectations during the full year.

$1 = 0.7849 pounds Reporting By Justin George Varghese; Editing by Amrutha Gayathri and Susan Fenton