Financial News

LONDON (ShareCast) - RPS is back on the acquisition trail, buying up an Australian planning, surveying and environmental consultancy.

The acquisitive UK-based environmental consultancy is paying a maximum of A$64.4m (£31.3m) in cash for Brisbane-based Conics Ltd.

Conics has a strong market presence in Queensland, which will complement RPS’s existing Australian business, which is strong in Western Australia.

“'With Conics as part of the Group, we will have over 900 staff in Australia and will be leaders in a number of important markets. Following significant integration costs in 2009, we anticipate Conics will make an important contribution to our results in 2010 and beyond,” said RPS chairman Brook Land.

Conics employs around 570 employees, of which 82 are shareholders in the company. All but two of the shareholders have committed to staying with the company once the acquisition has been completed. The two shareholders not staying on are both taking retirement.

In the year to 30 June 2008 Conics had revenue of A$78.8m (£8.4m) and made a profit before tax of A$11.5m (£5.6m). Profits for the financial year just completed are expected to be of a similar level

Net assets at the end of June 2008 were A$24.15m (£11.76m) while gross assets totalled A$46.16m (£22.47m).

RPS said its interim results, due to be announced at the end of July, are expected to be in line with market expectations, while the interim dividend will be increased by a similar percentage to that seen in previous years.

The group said it is still experiencing pricing pressure and project delays in a number of its markets as a result of the recession and credit squeeze, though the recent rise in the oil price appears to have revived expansion plans for many customers in the oil and gas sector.

The water and nuclear sectors are proving to be especially resilient in the UK, Netherlands and Australia. The full effect on public sector spending of increased government borrowing to fund fiscal stimulus programmes is not yet apparent, and probably won’t be for some time, the group said.