Chief Executive's Statement
Our strategy

Looking forward

Our UK activity is underpinned by the provision of specialist, not commodity, services to several long-standing clients in the private and public sectors. With approximately 50% of our UK revenue coming directly from UK government (central or local), the Group is highly dependent on continued government expenditure.

The current economic turmoil and increased government debt will undoubtedly put pressure on the government’s finances, particularly from 2010/11 onwards.

The Group is, however, well positioned despite potential spending cuts because of a number of factors:

• There will always be a demand for high-value technical skills - where quality is the major determinant - and these will be in greater demand as the complexity of the questions and challenges facing our clients increase.
• The drive to satisfy the UK’s Carbon Reduction Commitment will further increase the need for technical solutions to achieve the government’s targets.
• Decarbonising the economy, together with an increasing need for capacity, reliability and predictability should particularly enhance demand for skills in, for example, our nuclear, transmission and distribution, utilities and rail markets.
• The government can increase efficiency by spending more time on the planning and designing of projects. Putting more thought into less construction is an area where the Group is particularly strong.

The Middle East comprises several markets and although the Dubai property market was effectively frozen from late calendar 2008, many other geographic markets and sectors continue to be active. The challenges arose from a liquidity issue in the region which led to a number of confidence issues. Confidence will return, and the region as a whole will continue to be an attractive area that can support a significant Atkins business, increasingly in essential infrastructure as well as buildings, built on experience and relationships established in the decades that we have been present in the Middle East.

The US workload, driven by a variety of clients, is steady and we anticipate that fiscal stimulus will help to increase activity levels in infrastructure-related areas.

Europe and China are longer term prospects for the Group - but infrastructure needs will drive medium term demand.

Our deep local presence and drive for the type of value-for-money engineering that cannot be achieved at the commodity end of the spectrum place us well to deliver in all of these markets in the short term and beyond.

We are confident that with our culture, skills and business model we are, as evidenced by this year’s continued improvement in financial performance, well positioned to weather the turbulent global economic climate and emerge stronger.

Keith Clarke

Chief Executive
16 June 2009