Consultant’s reaction to £121m hit increases chances of tube consortium’s insolvency
Keith Clarke, the chief executive of Atkins, would not commit this week to ploughing more money into Metronet after the company declared a £121m loss on the upgrading of London Underground.
The hit caused Atkins to produce its worst set of results under Clarke, reporting: an overall loss of £36.9m. The consultant, which has a 20% stake in the PPP consortium, was also hit by the big write-down on Metronet. This included £70m of equity investment, a £21.3m profit reversal, and additional supply-chain provisions.
Atkins’ consortium partner, Balfour Beatty, said in a trading update that it was taking a £100m exceptional charge over Metronet. However, the impact on its interim results, due in August, will be largely offset by exceptional gains of £90m related to sales and acquisitions.
This is the first time Metronet has caused Atkins to make a loss on its overall business. The uncertainty over future equity has fuelled speculation that the PPP could become insolvent if London Underground does not strike a revised deal with the consortium.
Clarke said the hit reflected the uncertainty of th