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WSP Global reports bigger profits, backlog as it aspires to enter engineering pantheon

The Canadian Press
WSP Global reports bigger profits, backlog as it aspires to enter engineering pantheon

MONTREAL — WSP Global Inc. bolstered its backlog to $7.7 billion last quarter following its acquisition of New Jersey-based Berger Group Holdings Inc. in December as the company continues a push for growth.

The backlog rose 18 per cent from the previous quarter following the $400-million Berger acquisition, which drew 5,000 more employees into the WSP fold.

Organic growth helped boost fourth-quarter profit to $43.3 million, up from $30.3 million a year ago.

Revenue totalled $2.04 billion, up from $1.95 billion in the last three months of 2017 and making the $4 million the Competition Bureau ordered WSP to pay for bid-rigging on municipal infrastructure contracts in Quebec seem like a drop in the bucket.

Canada’s competition watchdog said the payment is part of a settlement filed with the Superior Court of Quebec for the company’s role in a bid-rigging scheme between 2002 and 2011, when the firm was known as Genivar Inc.

Chief executive Alexandre L’Heureux said the company is “concerned” about Brexit and is “taking a more cautious approach” in the U.K., where it nonetheless achieved seven per cent organic growth last year — so we could be pleasantly surprised,” he said on a conference call with investors.

WSP unveiled a sunny strategic plan in January that forecasts double-digit revenue growth through 2021, when it expects to rake in up to US$9 billion.

Once a boutique firm, the 60-year-old company has swelled to 48,000 employees from 17,000 in 2014, and aims to exceed rival SNC-Lavalin Group Inc. with 65,000 workers in the next three years.

Its market value of $7.39 billion now exceeds SNC-Lavalin’s by more than $1 billion.

Beefed up by about 29 company acquisitions since 2015, WSP’s ongoing expansion won’t come at the cost of excessive leverage, RBC Dominion Securities analyst Derek Spronck says.

In a note to investors, he said the company “continues its journey towards becoming a ‘Big Four’ in engineering and consultancy,” citing “strong top-line growth.”

WSP said net earnings amounted to 41 cents per diluted share for the quarter ended Dec. 31 compared 29 cents per diluted share a year ago.

On an adjusted basis, the firm earned $59.1 million or 57 cents per share for its most recent quarter, up 50 per cent compared with a year ago.

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