Atkinsā€™ boss on the gains from being the engineering provider for London 2012, and on returning the firm to growth

As the UKā€™s biggest multi-disciplinary consultancy by UK fees, Atkins can reasonably be expected to cater to a vast array of different clients. But horses? Strange as it may sound, in the build-up to the London 2012 Olympics Games, the firm found itself moving into the business of, to coin a phrase, equine solutions.

As the official engineering partner to the 2012 Olympics, Atkins found itself responsible for constructing the arena for the riding events in Greenwich Park. Owing to the requirements of the Gamesā€™ sustainability standards, however, the ground couldnā€™t simply be prepared and stands erected around it as this would involve ripping up a large part of the historic parkland. Instead, the arena had to be mounted above the ground. And it soon became apparent that if the elite horses sensed that they werenā€™t standing on solid ground they got jittery.

ā€œSo, we had to mock them up and then test them with our client, which in this case was a horse,ā€ says David Tonkin, chief executive Atkinsā€™ UK business. ā€œOf course, the horse couldnā€™t tell us what was going on, but the rider could tell us when the horse wasnā€™t feeling safe. So we interviewed the rider and ended up going through an iterative process.ā€
After drafting in a huge range of specialists from across the companyā€™s various divisions, a solution was eventually found and the equestrian events were able to proceed.

The tale of the sensitive filly is just one of a series of stories about Atkinsā€™ involvement in the Olympics that Tonkin tells with obvious satisfaction and his characteristic ready smile over the course of our interview. (Another relates to the unfortunate interface between industrial air-conditioning units and 1.9 gram ping-pong balls.) Tonkin, an accountant rather than engineer by training, is obviously proud of the contribution his company made to the Gamesā€™ success and believes that, quite apart from anything else, it gave his team a huge boost in morale, just as the company fights to win work and recover from the recession.

Iā€™ve already got scale in the UK but niche market areas where i can see growth, then bolt-on acquisitions could be quite interesting

Of course, the fact that Tonkin can talk so openly and passionately to the press about Atkinsā€™ involvement in the Games makes him unique in construction terms. While the other construction companies that helped deliver the Olympics were subject to the rigidly enforced No Marketing Rights Protocol, Atkinsā€™ status as official partner means that the company is subject to no such restrictions.

Tonkin is unable to supply a figure for how much Atkins paid the International Olympic Committee for its privileged status, but he is keen to emphasise that the firmā€™s appointment was the result of an open competition in which price was only one factor. However, asked whether he believes the financial cost to have been worth it in terms of the benefits partner status brought the company, he is unambiguous. ā€œFirst off, I judge it on the experience that it allowed for us to get for our staff, which was immense,ā€ he says. ā€œBut then it allowed us to showcase what we did. Atkins can be a little shy in terms of explaining what we do, but the Olympics gave us a great opportunity.ā€

As an example, Tonkin cites Atkinsā€™ work on remediating the land that would become the Olympic park. This, he says, means that the firm has a calling card that can be used to win work on any complex, large-scale remediation project. More immediately tangible, Tonkin says that Atkins has already won new work on the 2014 Commonwealth Games in Glasgow as a direct result of its work on London 2012. ā€œWhen it comes to things like the Commonwealth Games there are very direct benefits,ā€ he says. ā€œPeople can say ā€˜whatā€™s your credibility?ā€™ and we can say ā€˜well, we did this small job down in the South-east ā€¦ā€™.ā€

Surprisingly, however, Tonkin reveals that Atkins has made a decision not to seek work on the next Olympics in Rio, despite the companyā€™s association with the widely admired London Games.

Equestrian centre, Greenwich park

For the equestrian centre in Greenwich park, Atkins designed a solution to make the sloping site level ā€“ a deck of specialist plywood on metal legs which sits directly on the ground without the need to dig

ā€œWeā€™ve gone out to help the British government promote whatā€™s happened, but Rio really isnā€™t a target for us,ā€ he says. ā€œOur feeling is that itā€™s not worthwhile setting up an office in Rio. Itā€™s not a territory we know well. We havenā€™t traded out there and we have enough other territories that we trade in that just following the next exciting project to a place we donā€™t know, where we donā€™t understand the working customs, is not necessarily our focus.ā€

Rio or no Rio, the publicity that Atkinsā€™ UK business has been able to generate from the Games couldnā€™t have come at a more vital moment. While the groupā€™s 2011/12 financial report showed a growth in both revenue and profit, UK business revenue fell by 7% and operating profits dropped by 16%. However, the situation appears to have stabilised, with the half year statement for the six months to September 2012 reporting that the UK businessā€™ revenue was unchanged on the same period in 2011 and operating profit was up 0.8% - not results that would prompt anybody to break out the Bollinger, but at least the decline has been addressed.

Tonkin says that he is now, at last, seeing new opportunities coming forward - particularly in rail, aviation and education ā€“ and that the UK business is poised for growth, largely from domestic work, although the aerospace division is looking at opportunities in the US. Atkins UK is also recruiting again, having identified the need for about 1,000 new staff. In particular, he is keen to point out that Atkins is once again recruiting graduates at pre-recession levels. Having reduced its October intake to about 120 in 2010, Tonkin says that last
year the firm took on 250 graduates and that he expects to take on a further 350 in this yearā€™s round.

Given that Atkins shed around 1,200 jobs in response to the recession and falling state infrastructure investment, would it be fair to suggest that the current emphasis on graduates will ultimately create a less experienced workforce? ā€œNo,ā€ replies Tonkin succinctly. He expands: ā€œWeā€™ve got 9,200 staff, so to have 250 graduates in a staff of 9,200 is a pretty small dilution. And we do have a very experienced workforce, so a bit of rebalancing to make sure that weā€™ve got fresh blood coming in to learn from that experience is very important.ā€

Looking ahead, Tonkin expresses some confidence that the 2012/13 annual report will herald a return to growth for Atkinsā€™ UK business. ā€œIā€™d expect to see a bit of modest growth in headcount and weā€™ll be on target on revenue and profit and looking okay,ā€ he says. Whatā€™s more, after last yearā€™s sale of Atkinsā€™ asset management business, Tonkin says that he isnā€™t considering further disposals or another restructuring of the business. ā€œWe will be constantly looking at our portfolio, but thereā€™s nothing [in particular] Iā€™m looking at right now,ā€ he says.

Indeed, it seems that Atkins UK is once again in acquisitive mood. ā€œWhat weā€™re unlikely to do is to buy bigger scale [companies], because Iā€™ve already got scale in the UK,ā€ he says. ā€œBut niche capabilities, niche market areas where I can see growth, then bolt-on acquisitions could be quite interesting.ā€ Asked whether he has his eye on any firms in particular, however, Tonkin just smiles. ā€œIā€™m always looking,ā€ he says.

It has, of course, been rumoured in the past that Atkins itself might be bought out in its entirety by a bigger firm. Tonkin doesnā€™t deny that such an event is possible, but it isnā€™t something that gives him restless nights. At 18,000 people worldwide, he says, Atkins is too big a fish to be easily swallowed up by a bigger predator. ā€œObviously there are players up around 40,000 to 50,000 and we are seeing quite a lot of consolidation,ā€ he says. ā€œBut weā€™re a very big bite at 18,000. Itā€™s not something that worries us.ā€

David Tonkinā€™s CV

  • 1984-1987 Bass Plc

Capital accountant and plant accountant

  • 1987 - 1988 United ¾«¶«Ó°ŹÓ Society Christchurch NZ

Project accountant

  • 1989-1992 Equipu

Financial controller of subsidiary of Eurocopy Plc

  • 1992-1999 Hanson Aggregates

Group Financial director

  • 2000-2004 Hanson Plc

Finance director - UK Aggregates

  • 2005 - 2010 Atkins

MD and finance director - UK Rail Division

  • 2010 to date Atkins

Chief executive officer, UK