UPDATE 2-Scott Wilson sees growth in international biz in FY10

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Tue Jun 30, 2009 6:06am EDT

* Sees growth in India, China, Middle East, Eastern Europe

* Sees UK business flat over next 12 mths

* FY adjusted oper profit flat

* FY rev up 11 pct at 360 mln stg

* Shares rise as much as 10 pct (Recasts; adds CEO and analyst comments, updates share movement)

By Shivani Singh

BANGALORE, June 30 (Reuters) - Design and engineering consultancy Scott Wilson Group Plc SWG.L expects growth in its international business to continue over the next year but anticipates UK business to be flat and does not see any recovery in the private sector property market in the short term.

Shares of the company, which posted a flat full year adjusted operating profit earlier on Tuesday, rose as much as 10 percent.

"India and China are clearly high growth markets. At the moment we have 1200 people in China and 650 people in India," Chief Executive Hugh Blackwood told Reuters by phone.

Eastern Europe and the Middle East are also high growth markets, but the UK business contributes about 70 percent to the company's revenue, Blackwood said.

"We see a market for urban metros, and certainly in the large cities in Asia, Middle East and Europe," Blackwood said.

Longer term, the company expects to have strong penetration in the Americas and is also looking to improve its presence in the global energy market, he said.

Panmure Gordon analyst Mike Allen upgraded the company's stock to "buy" from "hold" on Tuesday and raised his price target to 79 pence from 63 pence, saying the non-UK business continues to be a key growth driver for the company.

"Scott Wilson have delivered final results marginally ahead of our expectations at the adjusted profit before tax level, with net debt significantly below our expectations," Allen said in a note to clients.

Scott Wilson which has cut 9 percent of its total workforce as part of its restructuring drive has also cut back on recruitment, and is being conservative about capital expenditure.

FY ADJUSTED OPER PROFIT FLAT

The company, which has contracts for London's Crossrail and 2012 Olympics, said adjusted operating profit for the full year remained unchanged at 22.6 million pounds ($37.60 million).

Pretax profit for the year ended May 3 was 22 million pounds ($36.60 million) compared with 23.9 million pounds a year ago.

Revenue, including share of joint ventures, rose 11 percent to 360 million pounds.

Full year dividend increased 11 percent to 4 pence a share.

The year also included an exceptional charge of 7.0 million pounds due to redundancy costs and losses incurred as a project in the Middle East was indefinitely postponed.

Net debt was 18.3 million pounds as of May 3 and the order book was 291 million pounds.

Shares of the company were trading up 4 percent at 69 pence at 1000 GMT on the London Stock Exchange, after touching a high of 72.75 pence earlier in the session. ($1=.6011 Pound) (Editing by Kavita Chandran)

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