Weaknesses in the public sector has meant 400 job cuts and profit before tax diving by nearly half for WSP, the design and engineering consultancy.
Reporting to the Stock Exchange on the first six months to 30 June 2011, the company said revenue grew to £362.2 million, from £354.4m in the same period last year. But profit before tax slumped 47 per cent, to £8.9m from £17m.
Public sector cuts have meant restructuring at the firm, incurring costs of £2m in the period. The workforce at 30 June 2011 stands at 8,500, compared with 8,900 at 31 December 2010.
Chief executive Chris Cole said: “We entered 2011 anticipating that our markets and trading patterns would be similar to those experienced in 2010. With the exception of the further significant tightening seen in the UK public sector this broadly remains the case.
“The group’s strategy of diversification across regions and sectors is providing a platform of resilience and opportunity. Despite the current uncertainty in the UK market our traditional bias towards the private sector will serve us well as this sector progresses.
“We remain encouraged by the economic outlook in Sweden which supports our significant operations, and elsewhere around the world our market standing, experience and financial strength will support our performance and position us well for the future as markets improve.”
WSG has an order book of £892m at 30 June 2011 (December 2010: £908m). Net debt stands at £76.2m.
The company said the UK private property sector is gradually recovering albeit with a bias towards London and the South East. Recent major project wins in London include at the Heron Plaza and Leadenhall Building, a joint venture between British Land and Oxford Properties.
Transport and infrastructure, which is mainly focused on the public sector and in particular roads, has seen revenues fall 8 per cent to £100.5m, from £109m last year. Environment and energy have seen revenue increase to £43.8m, from £40.8m in 2010.
The company added: “The outlook for our UK public sector work, particularly roads and education, is uncertain and accordingly we believe we are now taking the appropriate further restructuring actions whilst we continue to diversify our activities with increasing success into the regulated sectors of rail and water.
“Our experience and reputation in the private sector is providing increasing work and opportunities and we remain well positioned as this sector recovers.”