Atkins CFO drafts a plan for action to reposition the design infrastructure business
Heath Drewett, group finance director of Atkins
As a finance chief it must be a warm feeling watching your company's share price edging up post-results presentation. It's what Heath Drewett, group finance director of design and engineering business Atkins plc, has been doing since the early February when Atkins reported robust half-year earnings and profits.
But Drewett wasn't watching the rising share price for the warm glow it offers, but more as an exercise in investor psychology. "I wondered to what extent ... shareholders that have been watching and waiting for this inflection point are now deciding 'OK, this is the time to move in'," Drewett says in an exclusive interview with CFO World.
Despite tough markets in the UK over the past two to three years, Atkins has grown top and bottom line at between 5 and 7 percent while repositioning the company in other regions ready for an upturn in growth. Forecasts suggest that operating profits will be about £100 million this year on revenues of over £1.6 billion.
"The market itself is now recognising that there are growth opportunities," he says.
The finance chief has been helping to drive the business to boost sales without much top line growth over the past few years, but now he feels that they are reaching that "inflection point" where both revenue and profits grow together. It's the point that investors have been waiting for, too.
He likens investors to surfers waiting on a beach, when they should, he argues, be in the water ready to catch the wave. "If you get out in the water then you'll catch the wave when it comes, but if you're standing on the beach asking me to tell you when the big wave's coming then, you know ... 'Get in there, get yourself a holding'," he says, noting that he has little sympathy for investors who miss an opportunity.
That said, Atkins – which is also the London Olympics 2012 official engineering design services provider – has a pretty stable, loyal shareholder register which Drewett says has supported the business during the recent economic turmoil and uncertainty. A stable shareholder register can, however, pose challenges when a business is on the up. "The problem with a stable one is that it's difficult to attract new shareholders in terms of liquidity of the stock."
But it is not an issue that is bothering him at present. "Our top 10 investors have been with the company for a long time and are supportive and encouraged by the recent momentum behind the share price."
Shareholder engagement is a pertinent issue with the growing outcry over executive pay and the government's plans to bequeath greater powers to shareholders in terms of a binding vote on remuneration.
Drewett considers this last point to be a moot one as he labours under no illusion with whom his responsibilities lie. "Whether they've got that [extra power] or not, the shareholder will one way or another respond if I don't do a good job, either through pay or they'll find someone else to do the job.
"If I'm underperforming, the shareholder isn't going to wait 365 days to exercise his vote at the annual general meeting. The shareholder will bring to bear its views on the business through the board and the governance structure. Whether you enshrined those powers in law, well it's still clear to me that I'm accountable to the shareholder to reinvest and return a value."
And that is what Drewett has been busy doing. Like many companies, Atkins' board took an executive decision to reposition the business ahead of what they considered to be a long and painful recession.
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