UK technology and engineering consultancy WS Atkins has blamed its recent profits warning on the one thing it ought to be able to control in its line of business – a technology project.
WS Atkins, which describes itself as ‘one of the world’s leading providers of professional, technologically based consultancy and support services’, warned investors in October 2002 of an increase in its net debt to £120 million during the six-month period from March to September 2002, from £57 million when it reported its annual results in March.
Around £30 million of this shortfall, the company said, resulted from difficulties it encountered installing a new billing and payroll system. In the financial year to date, the company has spent £50 million on technology, £39 million more than it spent during its 2001 financial year.
In a trading statement, the company admitted: “The introduction of the technology refresh and new control systems has been more difficult and costly than expected.” This had an adverse impact on its ability to control credit and billing agreements with its suppliers.
News of the increase in debt sent WS Atkins’ share price on the London Stock Exchange plummeting. Yet on its web site, the company continues to boast that it is “well known for its innovative use of technology to support modern business practices”. Or, perhaps, to undermine them?