Annual Report
04
WSP Group Plc Annual Report and Accounts 2004 Contents
WSP is a global business with the vision to be the
outstanding supplier of specialist and integrated
services in the built and natural environment.
01 Financial Highlights
02 Chairman’s Statement 
04 Chief Executive’s Review
08 Group Finance Director’s Review
12 Operational Review
13 United Kingdom
17 Europe
19 United States of America
21 International
23 Environmental
24 Creating Sustainable Value for Stakeholders
28 Our People
30 Board of Directors
32 Performance Committee
33 Directors’ Report 
37 Corporate Governance Report 
41 Remuneration Report 
45 Auditors’ Report
46 Consolidated Profit and Loss Account 
47 Balance Sheets 
48 Consolidated Cash Flow Statement 
49 Statement of Group T otal 
Recognised Gains and Losses 
49 Reconciliation of Movements 
in Group Equity Shareholders’ Funds 
50 Accounting Policies
54 Notes to the Financial Statements
76 Five Y ear Review 
Principle Offices
UK and Registered Office
WSP Group plc
Buchanan House
24-30 Holborn
London
EC1N 2HS
UK
Tel + 44 (0)20 7314 5000
Fax + 44 (0)20 7314 5111
WSP Group plc is registered in England.
Company Number: 2136404
EUROPE
WSP Sweden
121 88 Stockholm-Globen
Arenavagen 7
Stockholm
Sweden
T el + 46 (0)8 688 6000
Fax + 46 (0)8 688 6999
AFRICA
WSP South Africa
WSP House
Ariel Business Park
Simba Road
Sunninghill
Sandton 2157
Johannesburg
South Africa
Tel + 27 (0)11 233 7800
Fax + 27 (0)11 803 7430
Advisers
STOCKBROKERS
Hoare Govett Limited
250 Bishopsgate
London
EC2M 4AA
SOLICITORS
Nabarro Nathanson
Lacon House
Theobald's Road
London
WC1X 8RW
AUDITORS
PricewaterhouseCoopers LLP
1 Embankment Place
London
WC2N 6RH
REGISTRARS
Capita IRG plc
The Registry
34 Beckenham Road
Beckenham
Kent
BR3 4TU
PRINCIPAL BANKERS
Barclays Bank plc
50 Pall Mall
London
SW1A 1QB
Fleet National Bank
1185 Avenue of the Americas
New Y ork 10036
USA
HSBC Bank plc
70 Pall Mall
London
SW1Y 5EZ
FöreningsSparbanken AB (Swedbank)
Brunkebergstorg 8
105 34 Stockholm
Sweden
USA
Flack + Kurtz
475 Fifth Avenue
New Y ork
NY 10017
USA
Tel + 1 212 532 9600
Fax + 1 212 689 7489
WSP Cantor Seinuk
3rd Floor
228 East 45th Street
New Y ork
NY 10017
USA
Tel + 1 212 687 9888
Fax + 1 646 487 5501
ASIA
WSP Asia
1/F, K. Wah Centre
191 Java Road
North Point
Hong Kong
Tel + 852 2217 2000
Fax + 852 2802 9626
Further information regarding WSP office addresses can be found on our website: www.wspgroup.com
This Report is printed on both Challenger Art and Challenger Offset paper. These papers are sourced from sustainable forests, totally
chlorine free (TCF), suitable for recycling, and suitable for archive storage.
Accreditations: 
Page 3 © Esto, Page 6 © BAA, Page 16 (Middle) © Mikael Ullén, Page 16 (Bottom) Courtesy of Costain Ltd and the Highways Agency, Page 18 (T op) © Timothy Hursley,
Page 18 (Bottom) © Jane Gosney, Page 22 (Top) Image courtesy of: Assael Architecture Ltd, Page 22 (Middle) Image courtesy of: BDP , Page 26 © Timothy Hursley. WSP Annual Report 2004  1
Financial Highlights
To demonstrate the underlying trading performance of the Group operating profit and earnings per share appearing above exclude exceptional items
and amortisation of goodwill, details of which are set out in the five year review on page 76.
Turnover (£m) Earnings per share (pence) Operating Profit (£m)
Property
WSP is one of the largest consultants providing management and
design expertise in the property sector throughout the world. Our
expertise ranges from the world’s tallest buildings and corporate
headquarters to hospitals, urban regeneration and leisure.
T urnover Operating Employees
Profit
58% 53% 59%
Transport & Infrastructure
WSP provides expert advice on a wide range of transport 
related engineering projects, including roads, rail, bridges, tunnels 
and utility services. Our extensive experience includes planning,
analysing, designing and managing projects for a wide range of
service providers.
T urnover Operating Employees
Profit
30% 32% 30%
T urnover Operating Employees
Profit
12% 15% 11%
Environmental
WSP combines long experience from environmental projects with
commercial awareness and an understanding of the property and
financial sectors.WSP delivers business solutions on a global basis 
that range from sustainability consulting to due diligence auditing to
contaminated land and financial engineering of environmental liabilities. Chairman’s Statement
I am pleased to report a successful year
for the Group with good financial results
that have exceeded expectations.We
have seen increased turnover with
maintained profit margins together with
improved operating profits and strong
cash-flows from our trading activities.
Our order book is at another record
level, with more than £500m of secured
orders representing a 23% increase on
last year.The quality of this order book 
in terms of prestigious projects and long
term framework agreements confirms 
our leading position in the market and
underpins the sustainability of our 
future operations.
These good results also reflect the
improvement in our overall operational
performance coupled with our ability to
win market share from our competitors.
Financial Results and Dividends
Turnover for the year, including our 
share of joint ventures and associated
undertakings, increased to £328.2m
(2003: £298.9m), and this generated an
operating profit, before amortisation of
goodwill, of £17.8 m (2003: £13.8m),
an increase of 30%. Operating profit
increased by 46% to £12.4m 
(2003: £8.5m).
Basic earnings per share has more than
doubled to 7.6p (2003: 3.6p), and fully
diluted earnings per share before
amortisation of goodwill has increased 
by 29% to 16.0p (2003: 12.4p).
We have also seen strong operating cash
flows from our trading activities of
£24.0m (2003: £17.3m) and despite the
outflows of £9m arising from one-off
transactions including the closure of the
Swedish cross currency swap and the
payment of a contractual claim, net debt
has remained stable at £45.0m 
(2003: £44.6m).
In view of these results and our stated
dividend policy, the directors believe that
it is appropriate to increase the proposed
final dividend to 3.2p (2003: 3.0p) giving a
full year dividend of 5.3p (2003: 5.0p)
representing an increase for the year of
6%, the first increase since 2001.
Review of Activities
Our largest business segment, Property,
has progressed well and the hard work
over the last few years to improve our
business is now beginning to show
tangible rewards. As a world leader in the
commercial and financial private building
sector, we will particularly benefit as this
area continues to improve and this is
already noticeable in the USA where we
have seen stronger markets.
Our appointment to many prestigious
projects, particularly in the high-rise
sector, has been significant and I am
pleased to say that we are working on
more tall building projects under
construction in this country and in 
New York than any of our competitors.
Our involvement with so many major
schemes throughout the world in different
stages of design and construction has
created a unique market position enabling
us to promote our services for
consideration on many future projects.
Our skill and experience to cross-sell and
deliver all our services on a major project
makes WSP one of a select group of
international businesses with this unique
capability and presents the opportunity for
us to continue to grow our market share.
Our global Environmental business has
performed well and we continue to invest
to grow, diversify and strengthen the
business. Our focus has been on opening
new and strengthening existing offices
around the world to service our increasing
number of global clients with whom we
have won long-term framework agreements
and we have been successful in recruiting
many talented individuals to provide high
value consultancy support to deliver this
growth and geographical coverage.
The Transportation sector in Sweden,
where we are the market leader, has
flourished, and we have won a number
of high profile projects reflecting the
Government’s long-term financial
commitment to maintain and improve
the country’s infrastructure.This has not
been as evident in the UK where new
appointments were slow to materialise
and given our relative size in this market
we have seen a decline in margins.
However, we have once again received
an excellent CAT score from the UK
Highways Agency and we expect to
benefit from this in the year ahead.
The majority of our international activities
outside Europe have progressed well,
particularly in South Africa where
excellent growth and financial
performance has been achieved.We
continue to win projects in many new
countries including Libya, Serbia, Estonia,
Latvia, Romania, the Middle East and India
which maintains our diversification strategy
of generating 20% of our revenues from
work outside the UK and Scandinavia.
2 WSP Annual Report 2004
David Turner
Chairman
I am confident we will build on these good financial results to deliver continued growth, improved
profit margins, strong cash flows and an increasing long-term order book which includes major
international projects. Staff
Our performance this year and the
foundations now laid down for the future
have been delivered by our loyal and
talented international workforce of more
than 5,300 people. My thanks to them all
for their hard work and dedication and I
share their optimism for the future.
We have seen progress this year in the
retention of key staff as well as success in
recruiting a number of high profile senior
managers.We are very mindful of the
need to achieve our goal as the preferred
employer in our sector and we have
increased our investment in all aspects of
professional development and training.
The Future
We have a clear strategy where organic
growth remains a priority complemented
by strategic start-up businesses and niche
acquisitions to reinforce our existing
operations.We have also identified new
sectors and countries we wish to enter
progressively in order to develop our
core activities further.
Our focus on high added value
appointments will continue and to
support this we have recently established
a new management consultancy division.
In addition, we have a specific target to
improve the efficiency of our workforce
through improved resource management,
increased use of our off-shore, low-cost
design production centre and efficient,
central infrastructure support.
Our long-term order book, which is
evenly split between public and private
sector work, will continue to grow with
more success in winning major
international projects, where our unique
multi-skilled technical services will be
employed. Our portfolio includes some of
the world’s greatest projects, providing a
real testament to the Group’s progress
and position on the world stage.
We are confident that our global
Environmental business, which competes
with the world’s largest providers, will
continue to develop in this increasing
and important market. Our
entrepreneurial drive to enter new
sectors and countries will ensure we are
well placed to service our increasing
number of multinational clients.
I expect our world markets to remain
stable and I consider we are well
positioned to address these prevailing
conditions. I am optimistic that the UK
and Scandinavia will see progress in the
commercial markets and that growth in
the USA will be maintained.
We have a strong management team who
have now built the appropriate platform
and structure to continue the strategic
growth of the Group.
I am confident we will build on these
good financial results to deliver
continued growth, improved profit
margins, strong cash flows and an
increasing long-term order book which
includes major international projects. As
a result of this performance and our
position as a leader in the market I
believe we will deliver enhanced
shareholder value in the year ahead.
David T urner
Chairman
4 March 2005
WSP Annual Report 2004  3
The Winter Garden, New York City
This atrium at the World Financial Centre connects
restaurants with three levels of retail space and
serves as a unique venue for public events, concerts
and gala receptions. 4 WSP Annual Report 2004
Chief Executive’s Review
We remain focused on the long-term benefits of providing our clients with a single point
consultancy through the cross-selling of our unique range of services and the opportunity to
lead major projects.
I am particularly pleased with our 2004
performance which has demonstrated
how well we have built upon the hard
work of the previous year.We have
continued to be focused on improving 
the business and providing the very best
service to our Clients.We have seen an
overall increase in net turnover and
operating profits of nearly 9% and 46%
respectively with our overall margins
maintained, good cash flow and significant
growth in our order book.
The markets in which we work have
remained similar to last year with
continued strong demand in the public
sector and mixed demand in the private
sector.Transportation has generally
remained sound, whilst we did note some
temporary delays in the UK roads market
in the second half of last year.We have not
yet witnessed any material improvement in
demand from the rail sector in the UK
whereas in Sweden, where we are a
market leader, activity is strong.
Health, education, prisons and defence
sectors have remained good, as have
residential and urban regeneration
schemes in all our regions.The retail and
leisure markets, as part of long-term
urban regeneration and mixed
development schemes, have remained
satisfactory. Our European industrial
sector has continued strongly. However,
the commercial and financial sectors
remained quiet, but we have witnessed
some improved activity.
Our global Environmental operations
have seen growth, gaining market share in
a growing market and presenting
themselves to a widening diversity of
clients across the world where they have
entered into a number of new
framework agreements.
We are increasingly moving towards
higher value front-end management
consultancy appointments and we have
realigned this part of our business to
ensure we focus on improving our
penetration into client organisations.
Our improved business has performed
well in these stable market conditions.
The Group’s infrastructure has provided
excellent support and I am pleased with
the manner in which we have matured in
this respect.
The strengthening of our long-term
order book to £505m is a sound
indicator of our strong position in the
market. It is also rewarding to note that
growth in orders has occurred in all of
our principal territories and that
framework and long term agreements
with major clients account for 40% of
the total.We have continued to receive
appointments where we have cross sold
all our skills and sometimes linked up 
our different territories, thus enhancing
the quality of our order book and
demonstrating our global reach. In
addition, our prominent market position
is presenting opportunities for major
projects where we are the overall
project leader. 2004 was a good year 
for our long-term order book and we
retained a desirable even split between
the private and public sector as well as
seeing good progress internationally.
Property
This largest division, which operates in all
regions, accounts for nearly 60% of the
Group’s turnover and over 50% of the
profit, and therefore I am pleased to see
Property profit margins improving. Our
markets were varied but generally similar
to the previous year, with the exception
of the USA where we saw good growth,
which has been achieved without any
material recovery in the commercial and
financial markets.
Our position in the UK and Europe has
strengthened throughout the year.
Sweden’s performance has been
underpinned by major industrial projects
and also winning two city centre
relocation schemes and two prominent
hospital projects, and the UK has benefited
from our leading position in urban
regeneration, health and education.The
range of work in the UK includes projects
such as the redevelopment of Great
Ormond Street Hospital, Addenbrookes
Hospital in Cambridge, and major schools
and prison programmes in Scotland.
Interestingly, after some years, we have
recommenced the design of high
technology data and call centres.
In Scandinavia we have been particularly
active in the industrial and energy markets
where we provide design and project
management services.
In the development arena our UK
transportation planning and modelling
resource, which looks after both the
private and public sectors, is now
regarded as the UK’s pre-eminent
resource in this high value sector and we
have taken initial steps to export this
expertise abroad.
Our international reputation has been
significantly underpinned through our
involvement on the world’s largest
projects.We are busy on the world’s
Christopher Cole
Chief Executive WSP Annual Report 2004  5
tallest building,The Freedom Tower in
New Y ork City , and Europe’s tallest, The
Shard of Glass in London.We are
currently involved in more high-rises
under construction in New York and the
UK than any other consultant. In addition,
new global opportunities are arising
regularly in this market to ensure we
maintain our position.
Our diversification strategy is well
illustrated by our involvement in all these
areas of Property and thus our increasing
resilience to the inevitable sector cycles.
The USA markets in which we work
continue to recover and this is evidenced
by our growing order book.The impact of
currency movements meant that our
turnover remained static last year but, as
we draw down on our increased order
book, we expect to see turnover increases
this year. Our new projects include the
New Y ork Plaza Hotel regeneration
scheme, the Brooklyn Arena and
Indianapolis Stadium. Our newer offices in
Seattle and Miami have each progressed
well during the year where we have
received significant new appointments.
Our operations in South Africa have
performed well with excellent growth 
in this region during the year, supported
particularly by their asset management
activities.We are now increasingly working
internationally for South African clients in
various countries, including Qatar and
Morocco, and our activities grow in Africa
overall.The market has been buoyant and
we believe this will be supported by the
award of the forthcoming 2010 Football
World Cup to South Africa.
The year has not seen the progress
expected from our Asia operations, where
we have centres in Hong Kong, Shanghai
and Manila.These markets are difficult but
our performance has been disappointing.
We have therefore made certain changes
and whilst we intend to commit to the
region to support our global activities,
we aim to limit our exposure through
restructuring the business and additionally
employing new management.
In Norway, the performance of our
associate company, Multiconsult, has
improved in line with expectation and in
the Gulf States, where we currently have
minimal presence, we are evaluating various
opportunities to expand in the area.
Our other international activities
continue to develop with new work in
many countries including Libya, Serbia,
Latvia, Nigeria, the West Indies and also
Central Asia, where we have maintained
a consistent presence. Our new office in
India has recently announced its first
meaningful project for road audit work 
in two states on behalf of the Asian
Development Bank.
Transport and Infrastructure
In the UK we had a mixed performance in
our highways and aviation sectors, where
we encountered a temporary reduction in
roads activity in the second half of last
year, which resulted in reduced turnover
and profit. Our size in relation to our
competitors somewhat restricts our
flexibility in addressing any short-term
change. Our leading position in aviation
has delivered a strong performance
particularly with the work associated 
with the building of Terminal 5 at
London Heathrow.
Notable recent wins have included the
new second generation terminal building
for Stansted Airport, where our
worldwide experience was recognised
by the client, and the N6 motorway for
the National Roads Authority in the
Republic of Ireland. In addition, the
Highways Agency recently reassessed
our Capability Assessment (CAT) score
and again our teams performed
excellently, ensuring we remained near
the top of the preferred supplier list.
This rating will ensure we engage with
the principal opportunities in the roads
market and form the most effective
partnerships with other suppliers.We
also participate with the Highways
Agency on two major frameworks for
road planning and our joint venture 
with Carillion on the Area 12 in
Yorkshire is progressing well.
Freedom Tower, New York City 
(Architect: Skidmore, Owings and Merrill LLP)
Our expertise in the design of high rise buildings 
is reflected in our appointment as the structural
engineer for the world’s tallest building. During the year we have refocused our
attention on the Local Authority market
with senior recruitments and some
important framework wins for the City of
Westminster, Newcastle City Council and
the London Borough of Barnet. Growth in
this sector is seen as a business priority.
We have seen little improvement in
railway work during the year. However, we
have recently been engaged in
opportunities arising out of Network
Rail’s review of their considerable assets
related to their main stations.
In Sweden, we have continued to do well
in the strong road and rail market, where
we are now the country’s largest
consultant.The National Road and Rail
Administration have re-confirmed their
significant budgets for infrastructure, where
£11bn is allocated to roads and rail over
the next ten years.We are consultants to
the country’s largest schemes including
new road and rail tunnels, stations and
highways in Gothenburg, Stockholm and
the West Link.
Our other principal businesses which
deliver these services are in Africa and
Finland. Africa has made excellent
progress, illustrated by major project wins
including the supervision of the
Johannesburg to Durban N3 motorways
upgrade, and the Caja bridge in
Mozambique.The businesses in Finland
are experiencing stable markets and our
operations have been complemented by
the acquisition last year of WSP Kortes,
which is an internationally renowned
bridge designer and has recently been
appointed for the Chenab Bridge in India,
the world’s longest single arch railway
bridge. In late 2004 the Finnish businesses
were re-branded to WSP and now
comprise nearly 300 staff.
Environmental
We are an increasingly global operation
with significant presence around the
world.The businesses are represented in
all the Group’s territories and, additionally,
we have a presence ranging from Australia
to the Middle East to various countries in
Europe.This coverage enabled us to work
on projects in 50 countries for global
Clients including Goldman Sachs, Smiths
Industries,Westpac Bank, Seagate Systems
and ANZ Bank.
We have seen solid year-on-year growth
and a good profit margin increase this
year.We continue to recruit talented
people to support our growth and
diversification. Our regions have all been
busy, whilst Sweden, which had a slow
start, initiated some changes in the first
half of the year, to the overall benefit of
their performance.
The markets and opportunities are
significant and diverse, which enable us to
exercise some project selectivity and
develop new professional services.
We challenge the world’s largest
environmental consultants and have
established a bespoke brand in the
market.We continue to focus on higher
value work in the areas of due diligence,
management systems, sustainability and
corporate and social responsibility.
Our global expertise is engaging us in
opportunities on a national scale, where
energy master-plans and carbon emission
models are formulated for cities and
global Clients, and to support this
specialist area we acquired a small niche
company in Finland, EMP , which has this
acknowledged expertise.
Staff
My sincere thanks to our directors and
staff for their energy and enthusiasm to
deliver an excellent set of results.Whilst
ensuring such achievements, they have
also strengthened the Group through
recruitment and improved retention. Our
2004 staff surveys and improved retention
statistics have confirmed this progress to
our goal of becoming the industry’s
preferred employer.
Our directors and staff have all played
their part in strengthening the Group and
ensuring ongoing sustainability and I sense
their optimism for the future.
Future Strategy and Outlook
During 2004 we have reviewed our future
strategy and outlined the principal goals of
the Group.
We are clear in our ambition and
expectations for growth, improved
performance and continued diversification
within our overall sectors.We have
identified areas of our business to develop
as well as sectors and territories to
reinforce and enter, particularly in the UK
and Europe. Organic growth, which
remains an imperative, supported by
strategic local acquisitions and start-ups,
will continue to ensure further progress.
The Group remains focused on the needs
of the Operational Plan which has
provided such a sound platform for this
year’s performance and future growth.We
will continue to ensure that the Group’s
infrastructure and costs effectively
complement our growing operations.We
have implemented action to ensure we
can improve on the utilisation of our staff
and we will increase the usage of our
low-cost production centre in Manila, and
Chief Executive’s Review – continued
M25 Motorway Heathrow, London
WSP are part of the consortium with Balfour Beatty
to widen the M25 including the spur to the new
Terminal 5 at Heathrow, where we are also
providing environmental and multi-disciplinary
engineering services.
6 WSP Annual Report 2004 WSP Annual Report 2004  7
progressively look to introduce our
operations in Europe and USA to this
resource. I expect these actions to
support our required improvements in
future profit margins.
I foresee minimal change in most of our
markets this year, with an expected slow
recovery in the commercial and financial
sectors.These sectors in our main
territories have always been an indigenous
part of our project portfolio and,
accordingly, market improvements will
particularly benefit our ongoing operations.
I expect all our operations, with the
possible exception of Asia, to continue to
grow in the coming year with increasing
emphasis on their margins.
We remain focused on the long-term
benefits of providing our clients with a
single point consultancy through the
cross-selling of our unique range of
services and the opportunity to lead
major projects.We will continue to build
collaborative partnerships with clients,
professionals and contractors to ensure
we are well placed to respond to all
procurement routes on major projects.
Our market recognition and presence
continues to grow nationally and
internationally and I expect to be able to
consistently report substantial project
wins which will further enhance our long-
term order book and reputation.
Furthermore, we intend to build upon
recent success in delivering our services
to global clients, including Ericsson, across
various countries, often in the form of
frameworks. Our diversity of clients
ensures our maximum current exposure
is less than 4% of turnover to our largest
client and we will continue this discipline.
Our global Environmental activities, in a
world market that will only increase, will
maintain their growth model, reinforced
by further high value opportunities with
global clients.
In view of the above, our order book
should continue to grow and, importantly,
so will its quality where we capture
significant project opportunities and new
frameworks initiated from our unique
multi-disciplinary global resource.
Our expected growth will necessitate a
continued review of our management and
be assured we will address this key issue.
Important recruitments for the Group are
being identified.
As mentioned, I am pleased with the
progress and stability of the Group and
our performance in varied, albeit generally
consistent, market conditions. Our
concentration will be on organic growth,
complemented by selective small, local
strategic acquisitions, which will enhance
sound, resilient and sustainable growth.
In view of the above position, and the
opportunities that I am confident will
present themselves, I expect the Group to
progress well in 2005 and beyond.
Christopher Cole
Chief Executive
4 March 2005
Arabella Sheraton, Cape Town
WSP is a world leader in the hotel and leisure
sector with many projects across the world. 8 WSP Annual Report 2004
Group Finance Director’s Review
We have been very satisfied by our
financial performance during 2004.
Turnover has increased, overall profit
margins have been maintained and we
have generated strong cash flows from
our trading activities.
Turnover and Profit for the year
Turnover, including the share of our joint
venture and associated undertakings, has
increased to £328.2m (2003: £298.9m), of
which £137.6m (42%) arose in the UK and
£190.6m (58%) from overseas markets.
Operating profit increased by 46% from
£8.5m to £12.4m. Before amortisation of
goodwill, operating profit increased by
11.3% to £17.8m (2003: £16.0m).
These results include the contribution
from three niche acquisitions made during
the year at an initial cost of £2.5 million
payable wholly in cash.Turnover from
these acquisitions was £7.1m generating a
profit in the year of £0.3m.
A summary of the results for the year 
is set out in Table 1.
Joint V entures and 
Associated Undertakings
WSP has a 24.7% equity interest in
Multiconsult one of the top design
consultants in Norway.This year the
Group’s share of turnover from this
company fell slightly to £10.4m 
(2003: £11.3m) however our share 
of operating profit recovered well to
£0.8m (2003: £0.3m).
In the UK, our joint venture with Carillion
plc for the Yorkshire motorway and trunk
road network management contract, has
produced a small operating profit of
£0.1m (2003: loss £0.1m).
Profit margins
Work in the predominantly private
Property sector has increased and is
reflected in a small increase in profit
margins to 5.1%. Growth in the public
sector of Transport and Infrastructure has
been more static and whilst our margins
in Sweden have been maintained, the
effect of a slow down in the UK has
reduced our overall margin to 5.7%.
We can report steady progress in
improving margins in the Environmental
sector, which have now reached 6.9%,
with an underlying margin of 8.0% if pass
through subcontractor costs are deducted
from turnover.
The division of turnover between our
principal sectors and on a location of
operations basis, together with profit
margins, is set out in Table 2.
Goodwill
The Group continues to adopt FRS 10,
which requires goodwill to be amortised
over its effective life. At the balance sheet
date, intangible assets, representing the
net book value of goodwill on acquisitions
made in the past, amounted to £89.1m
(2003: £92.6m), which included £2.3m
from acquisitions in the year. An
amortisation charge of £5.4m (2003:
£5.3m) has been made in the current
year and the directors are satisfied that
there has been no impairment in the
value of this asset.
Bank interest
The refinancing of the Group’s long term
debt early in 2004 spread our principal
borrowings between Sweden and the
UK. As a result the Group has benefited
from the lower interest rates prevailing in
Scandinavia which, coupled with good
cash management, has reduced our
interest charge for the year to £2.8m
(2003: £3.3m).
Taxation
The tax charge for the year amounted to
£4.8m (2003: £3.4m), which is an effective
tax rate on profit on ordinary activities
before amortisation of goodwill of 31.8%
(2003: 31.6%). Full details of how the tax
charge is calculated may be found in note
8 to the financial statements.
Earnings per share
Basic earnings per share has more than
doubled to 7.6p (2003: 3.6p), and fully
diluted earnings per share before
Malcolm Paul
Group Finance Director
Table 1: 2004 Results
2004 2003
£’000 £’000
Group and share of joint ventures and associated undertakings turnover 328,218 298,868
Less: share of turnover of joint ventures and associated undertakings’ (19,972) (15,315)
Turnover 308,246 283,553
Operating profit, before amortisation of goodwill 17,813 13,754
Amortisation of goodwill (5,446) (5,269)
Total operating profit 12,367 8,485
Profit on sale of subsidiary undertaking – 409
Net interest payable (2,801) (3,313)
Profit on ordinary activities before taxation 9,566 5,581
Our balanced approach to deliver excellent client service together with a strong commercial
focus will remain our central financial strategy for the year ahead. WSP Annual Report 2004  9
amortisation of goodwill has increased by
29% to 16.0p (2003: 12.4p).
Dividends
We intend to continue with our
established dividend policy that reflects
the growth in earnings whilst recognising
the cash flow demands of the business. In
October, the Company paid an increased
interim dividend of 2.1p (2003: 2.0p) and
with the good performance of the
Group during 2004 the directors believe
that it is appropriate to increase the
proposed final dividend to 3.2p (2003:
3.0p) giving a full year dividend of 5.3p
(2003: 5.0p) representing an increase for
the year of 6%.The final dividend will be
payable in May 2005.
The proposed total dividend for the year
of 5.3p is covered 3.2 times by profit after
taxation, before amortisation of goodwill.
Cash flow
We continue to generate significant
positive cash flows from our trading
activities of £24.0m (2003: £17.3m), and
whilst turnover has increased our
working capital requirement has
remained steady. During the year we
closed a cross currency swap taken out
in 2001 which was designed to hedge
our foreign exchange exposure on our
investment in Sweden.This has resulted
in a one off cash outflow of £6.8m
during the year which was met out of
our existing banking facilities.
Other expenditure has been carefully
controlled and at the end of the year net
debt amounted to £45.0m (2003: £44.6m).
The principal cash flow movements during
the year are set out in Table 3.
Bank facilities
During 2004 the Group restructured 
its borrowing facilities to reduce the
reliance on Banks in the UK. New
medium term bank facilities are now in
place in the UK, Sweden and the USA,
which at the year end total £53m, with 
a further £19m available of short term
working capital lines in the countries in
which we operate.
Accounting policies
In the current year the Group has
adopted UITF Abstract 38 regarding the
accounting for Employee Benefit Trusts,
which requires investments in own shares
to be deducted from Shareholder’s Funds
rather than being shown as a Fixed Asset
Investment.Where appropriate, earlier
comparative figures have been restated,
however this change in accounting policy
has not had a material effect on the
results of the Group.
There have been no other changes to 
the accounting policies applied to the
financial statements.
Pensions
The vast majority of the Group’s
worldwide employees are in defined
contribution schemes however in the UK
there are a number of defined benefit
schemes taken over by the Group
following acquisitions, all of which are
closed to new members.
During the year, further increases in
contributions to defined benefit schemes
have been made and action has been
taken in consultation with the members
of the schemes to freeze, for an initial
three year period, the level of salary to
which the schemes apply.
As required, the Group accounts for the
cost of pensions under SSAP 24, however
the accounts also disclose the impact that
FRS 17 would have on the Group’s
results. As a result of the action taken
above the net deficit, calculated under 
FRS 17, has reduced to £10.5m (2003:
£14.2m) and we shall continue to closely
monitor the impact these schemes have
on the Group’s results.
Financial instruments and Foreign
Exchange
Our policy is to manage centrally the
Group’s liquidity, funding and exposure
to foreign currency risk in a manner
which ensures straightforward
administration, the minimisation of risk
and operational flexibility.
Other than derivatives, the financial
instruments used by the Group comprise
internal cash resources, borrowings, and
debtors and creditors arising from normal
trading activities. Committed banking
facilities are negotiated to provide
working capital and acquisition finance to
meet the current and future requirements
of the Group.
Most of our trading activity is
denominated in the currencies relevant to
the local subsidiary, thus matching the
currency with its cost base.Where
contracts are awarded in non-local
currency the Group looks to mitigate the
foreign exchange risk having regard to all
the relevant circumstances.We do not
hedge our exposure to exchange
differences on day-to-day trading.
The acquisitions in the USA and Sweden
in 2000 and 2001 respectively created
significant investments in these territories
and thus an exposure to currency
fluctuations in the value of these assets. At
the time of the Swedish acquisition the
Group entered into a cross currency
swap to specifically hedge our exposure
and this was closed during 2004.We now
Table 2: Turnover and Operating Profit before amortisation of goodwill
Property Transport Environmental Associates T otal Regional
£’m £’m £’m £’m £’m %
2004 T urnover
United Kingdom 74 31 23 10 138 42.1%
Mainland Europe 64 51 11 10 136 41.5%
USA 27 - - - 27 8.2%
Africa 9 4 2 - 15 4.6%
Asia 3 7 - - 10 3.0%
Other 1 1 - - 2 0.6%
178 94 36 20 328 100.0%
2004 Operating profit
United Kingdom 4.0 1.7 2.1 0.1 7.9 44.4%
Mainland Europe 3.0 3.0 0.3 0.8 7.1 39.9%
USA 1.3 - - - 1.3 7.3%
Africa 1.0 0.3 0.1 - 1.4 7.9%
Asia ( 0.3 ) 0.3 - - 0.0 0.0%
Other - 0.1 - - 0.1 0.5%
9.0 5.4 2.5 0.9 17.8 100.0%
2004 Operating margins 5.1% 5.7% 6.9% 4.5% 5.4% Bridges
Top: Saame Bridge, Finland 
During the year, we acquired the Finnish company,
WSP Kortes, which introduced a world class bridge
design capability to the Group.
Middle: Swietokrzyski Bridge, Poland
This cable-stayed bridge with single pylon over the
river Vistala in Warsaw is a symbol of the new era in
the country.
Bottom: Crusell Bridge, Finland
To be constructed in Helsinki,WSP Kortes are
providing architectural and engineering services
including conceptual and detailed design.
10 WSP Annual Report 2004 partially mitigate the effect of currency
fluctuations on these investments using
the natural hedge created by US Dollar
and Swedish Kronor loans.
We have not considered it necessary 
to hedge our investments in other
overseas subsidiaries but the matter 
is kept under review.
In addition to these foreign exchange
exposures the Group, by virtue of its
borrowings in US Dollars and Swedish
Kronor, is subject to non-sterling interest
rate risk.We continually review our
exposure to floating interest rates and
assess the cost versus the benefit of
alternative instruments available to
minimise interest rate risks, however at
the present time our exposure to US
Dollar and Swedish Kronor interest rates
remains unhedged.
A summary of the Group’s borrowings,
financial risks and use of derivatives is
set out in note 26 to the financial
statements on pages 71 to 73.
International Financial Reporting
Standards (‘IFRS’) 
The Group is well advanced in addressing
the accounting changes brought about by
the introduction of IFRS in 2005.
A specific project team led by the
Group Finance Director has reviewed
and researched the implications of the
new Standards and completed a detailed
review.We do not expect there to be
any significant impact on our accounting
systems and the following areas have
been identified as those which may have
a material impact on the future results
of the Group.
 Goodwill arising on acquisitions will no
longer be amortised over its effective life
but will be subject to an annual
impairment review. At the year end such
a review revealed no impairment of the
carrying value of goodwill on the WSP
balance sheet.
 Future acquisitions will require a more
detailed analysis of the intangible assets
acquired including the allocation of
consideration to such items as trade
names, client relationships and long
term contracts.These intangible assets
will be amortised over their effective
useful lives, which will have an impact
on the reported results and future
earnings per share.
 The inclusion of the movement in the
WSP defined benefit schemes’ valuations
will introduce a volatility to the results
and may have a material impact on both
the reported profit and the liabilities
disclosed on the balance sheet.
However, these schemes are retained in
subsidiary undertakings and will not
impact on the Group’s distributable
reserves out of which future dividends
will be paid.
 The fair value attaching to long term
share incentive plans will change by
applying an option pricing model.Awards
made by WSP through its present long
term incentive plans are already
expensed through the profit and loss
account at the value pertaining at the
date of grant. In addition, in the past no
charge has been made for discretionary
share option awards or the SAYE scheme
and this will be necessary in the future if
such awards are made.
 During 2005 we will use the average
exchange rates to reflect the trading
performance of our overseas
subsidiaries rather than the present
closing exchange rate. In addition, the
financial statements will in future reflect
the impact of closing market valuations
on foreign currency derivatives, such as
the cross currency swap that was closed
during 2004. At present no such
derivatives exist in the Group.
 WSP already provides significant
segmental reporting information by
dividing our results between Property,
Infrastructure & Transport and
Environmental sectors. Additional data
will be provided for users of the financial
statements to gain a more detailed
understanding of the business dynamics
of the Group.
The Future
We have seen a general improvement in
the financial performance of WSP during
2004 in many of the sectors and
geographical regions in which we operate.
We continue to place cash management at
the forefront of our financial strategy and
we are focused on minimising the Group’s
working capital requirement.We intend to
continue with niche acquisitions where
they supplement our existing businesses
either by improving our skills or widening
our geographic base and we are likely to
finance such acquisitions using the cash we
generate from our trading activities.
Our balanced approach to deliver
excellent client service together with a
strong commercial focus will remain our
central financial strategy for the year ahead.
Malcolm Paul
Group Finance Director
4 March 2005
WSP Annual Report 2004  11
Table 3: Cash Flow
2004 2003
£’000 £’000
Operating Cash Flow 24,022 17,301 
Closure of currency swap (6,827) –
Bank and finance lease interest (2,801) (3,313)
Tax (4,679) (2,414)
Dividends (3,083) (2,794)
Capital expenditure (5,265) (4,339)
Acquisitions and disposals (2,139) (4,247)
Currency and other movements 346 867 
(426) 1,061 
Net Debt at 1 January (44,570) (45,631)
Net Debt at 31 December (44,996) (44,570)
Group Finance Director’s Review – continued Organisational structure
The WSP Group operates through
autonomous regional businesses
reporting to Executive Committees with
central support in the key areas of
communication, information technology,
human resources and risk management.
The matrix of the Group structure
facilitates close relationships between 
our clients and staff backed by the
knowledge and expertise of 5,300 staff
operating from more than 100 offices
worldwide. Increasingly, projects are
being won in one territory with the 
help and support from another and this
is giving true added value to our diverse
client base.
Where services sit comfortably across
borders, such as with environmental and
major international projects, our structure
aims to break down geographic boundaries
and encourages cross-company working,
in order to maximise our use of the skill
and resource available from throughout
the Group.
The skill transfer between our offices
enables the Group to offer solutions to
clients at the leading edge of technology
and innovation, and where possible we
encourage multinational teams to support
some of the most prestigious projects in
the world. Our broad spread of regional
offices means we also understand and can
react to the requirements of the local
market.The breadth of services we offer
enables our clients to use a single source
supplier for their design needs with the
obvious economic benefits that brings.
We are able to provide our clients with
unparalleled expertise in the three
principal fields of property, transport 
and infrastructure and the environment.
WSP is one of a very small number of
companies in the world able to offer 
fully integrated multi-disciplined services.
Regional coverage
Our largest resource is focused in the 
UK and Scandinavia where we employ
more than 4,000 people who deliver
approximately 80% of the Group’s 
turnover from multi-disiplinary services 
in all sectors.
In the United States of America our
principal market is in property, and we
have a significant presence on both the
East and West coasts.
In Africa we provide a full multi-disciplined
service in the property, transportation
and environmental sectors.We also
provide facilities management services, a
relatively new concept in the region.
India is a new market for the Group 
and we are looking forward to
developing an increased presence in 
a rapidly expanding market.
Our principal office in Hong Kong
provides a hub for delivering a broad-
based service to the rest of Asia, including
China,Thailand and the Philippines.
Our International development business
which has two principal offices, in the UK
and Sweden, largely works on aid-funded
projects in developing countries around
the world.
Operational Review
WSP GROUP PLC
PERFORMANCE
COMMITTEE
HUMAN
RESOURCE
STRATEGY
COMMITTEE
INFORMATION
TECHNOLOGY
WSP
UK
WSP
EUROPE
WSP
USA
WSP
ASIA
WSP
AFRICA
RISK
MANAGEMENT
MARKETING &
COMMUNICATIONS
WSP ENVIRONMENTAL
WSP INTERNATIONAL
12 WSP Annual Report 2004 United Kingdom
WSP UK 2004 2003
T urnover £106m £104m
Staff 1,731 1,798
The impetus generated during 2004
shows no sign of waning and we look
forward to the coming year with some
confidence. Our order book and prospects
have never been stronger and we are
seeing increased activity across all our
sectors. After some years of consolidation
we are in good shape to face the
challenges that the future will bring.
Property
Our world class expertise in the design of
tall buildings is reflected in projects such as
West India Quay and Barclays Bank
Headquarters in London Docklands, and
our designs for Holloway Circus,
Birmingham and the Hilton in Manchester
are in the course of construction. Our
preliminary concept work for London’s
Shard of Glass, Europe’s tallest building, are
complete and we look forward to the
commencement of construction following
the announcement by Shangri-La Hotels of
their intention to occupy 19 of its floors.
We have maintained our dominant
position in the retail sector where we
are appointed to approximately 75% of
all the major retail developments in the
UK. Following the completion and
opening of the Birmingham Bullring we
are now heavily involved with the
Paradise Street Development in
Liverpool for Grosvenor, which is
currently the UK’s largest urban
regeneration scheme.
Our strength in the healthcare sector
continues to grow and we are working
on major PFI hospitals such as North
Staffordshire and Newcastle as well as
Procure 21 appointments.We are
particularly pleased to have recently
been appointed to provide multi-
disciplinary services for the
refurbishment of Great Ormond 
Street Hospital.
We have seen, to great acclaim, the
completion of the major PFI project to
refurbish the Ministry of Defence
building in Whitehall, and this coming
year will see the completion of the new
Royal Bank of Scotland’s World
Headquarters in Edinburgh. Our
involvement with Terminal 5 at Heathrow
continues apace and our recent
appointment to a new second
generation terminal at Stansted Airport
reflects our growing status as a key
player in the UK aviation sector.
Our strategy to balance our private and
public sector client base continues with
work being won in the Building Schools
for the Future programme, the Scottish
Prison Service framework, HMP Prison
frameworks, Ministry of Defence prime
contracts, as well as frameworks for the
Department of Constitutional Affairs
and the Department of Heritage,
WSP Annual Report 2004  13
 Principal Offices
 Regional Offices High Rise Buildings
Top: Barclays Bank, London
WSP have considerable experience in London’s
Docklands where the new headquarters for Barclays
Bank is shortly to be completed.
Middle: Shard of Glass, London
(Client:The Sellar Property Group) 
The structural design for Europe’s tallest building is
presently under way.
Bottom: The New York Times Building
(Architect: Renzo Piano)
WSP are working on more high rise projects 
under construction in New York than any of 
our competitors.
14 WSP Annual Report 2004 Operational Review – continued
Culture and Sport.We envisage
continued growth in the public sector
with further high level central
Government appointments.
We are the leading provider of advice
on the planning and delivery of
transport systems within the private
property development sector where our
services are highly sought after as the
planning system imposes on our clients’
greater demands and a requirement for
increased stakeholder engagement.We
offer a comprehensive service to the
property development sector from
inception to completion and beyond and
our current order book includes a
substantial number of large residential,
mixed use, urban regeneration, major
retail, commercial and leisure projects in
a wide spread of locations across the UK.
Further resilience has been achieved in
the property sector by the development
of new front end earning streams
including Knowledge Based Asset Integrity
(‘KBAI’) with our partners, Capstone,
based in Houston, as well as PFI advisory
roles such as independent certifiers and
advisors to the special purpose vehicles
that carry out the projects as well as to
lead financiers to whom we act as due
diligence advisers on, for example, the
development of Wembley Stadium.
Our innovative KBAI risk based approach
to maintenance takes a long-recognised
methodology and combines it with tried
and tested processes from the oil and gas
industry.The result is a pragmatic
approach to maintenance that will deliver
substantial savings in budgets year on year
whatever the asset type. Full scale projects
are now up and running with the Royal
Mail Group and pilot schemes are
underway within other holders of major
property portfolios.
Our specialist divisions dealing with fire
engineering, lighting and vertical
transportation have prospered and we
expect our fire specialism to develop into
a global offering drawing on our skills in
the UK, USA, Sweden and the Far East.
Transport and Infrastructure
Our long-standing relationship with the
UK’s Highways Agency continues
unabated.The level of client care delivered
to this client and our drive for continuous
improvement was reflected in our recent
Capability Assessment (CAT) score of 68
out of a possible 72.We play a major role
on two framework agreements for road
planning, design and procurement in the
South-East and the South-West of
England.With over 20 years experience in
privatised road management and
maintenance, we are working with our
joint venture partner, Carillion plc, on the
Yorkshire network of motorways and
trunk roads to improve safety, journey
times and the residual quality of the
network for all road users and those who
live adjacent to the network.
A major challenge in 2004 has been the
detailed design and start of construction
of the M25 widening project taking in
the M4 and M3 junctions as well as the
new spur into Terminal 5 at Heathrow.
This high profile design and build project
with Balfour Beatty still has some time to
run until completion.The dedication,
effort and enthusiasm of our people on
this project reflect the true values of the
WSP Group.
A slow down in the financial commitment
on a number of other UK projects has
adversely effected our margins during the
year, however we have retained our
talented work force to respond when
these projects get the go ahead.
We experience steady and continuous
expansion in the Republic of Ireland. Our
office in Dublin has prospered and we
look forward to further growth. Recent
appointments include the Employer’s
Agent role on the N6 for the National
Roads Authority where we work in joint
venture with our partners, Ryan Hanley
of Galway.
We have also undertaken a significant
amount of planning related research so
that our thinking remains ahead of
Government and Local Authority policy
for the benefit of our client base.This
research included an investigation into
the effect of land use planning on travel
demand and congestion, the road
construction consent process for the
Scottish Executive and the publication of
an update of ‘The Good Transport
Guide’ for the British Council of
Shopping Centres.The document was
launched at the House of Commons in
November 2004.
Within the public sector, our policy and
research division in Cambridge continues
its world class work in transportation
studies, modelling and software design for
both UK central Government and the
European Union. Complementary to these
skills is our intelligent transport systems
division in Bristol and our local transport
businesses throughout the region.
WSP Annual Report 2004  15 16 WSP Annual Report 2004
Road and Rail
Top: Swedish Rail
We continue our commitment to the Swedish Road
and Rail Authority, where we are now the country’s
largest consultant.
Middle: Southern Link Tunnel
We have been appointed to some of Sweden’s
largest infrastructure schemes including this major
new link in Stockholm.
Bottom: M4 and A34 Junction
WSP in joint venture with Gifford and Partners
were commissioned to undertake the planning,
design and site supervision of the highway
improvement scheme which included a 1.5km
bypass and 12km of associated slip roads. Operational Review – continued
WSP Annual Report 2004  17
Europe
WSP EUROPE 2004 2003
T urnover £114m £99m
Staff 1,893 1,712
During the year WSP has strengthened its
position in Northern Europe.WSP
Sweden is one of the top three
consultants in its sector and we have a
growing resource in Finland. In Norway
our associate company, Multiconsult, is the
second largest in the country and we
now have small offices in Estonia, Poland,
France and Germany.
Sweden
Property
The building sectors have shown different
degrees of recovery during 2004.The
performance of our business within the
heavy process industry sector has been
outstanding, thanks in particular to an
upturn in industrial investment, which has
increased the department’s turnover by
50%.Two major projects are the civil and
structural design as well as construction
management for two large pulp and
paper mill extension projects for Stora
Enso in Sweden, which is aiming to
improve its competitiveness in uncoated
magazine paper and carton production. In
addition,WSP has been awarded several
large projects for LKAB in Kiruna and
Malmberget, including the extension of
two ore dressing and pellet plants to
increase their production.WSP is also
becoming progressively involved in moving
the city centres of the towns of Kiruna
and Malmberget due to the need to
relocate roads and railways, which are at
risk from ground subsidence from
continuing mining in the area.
Thanks to our domestic and overseas
experience in the pulp and paper
industry combined with our high
reputation in steel design WSP has been
awarded overseas work for the steel
design, including shop design, of two new
fibre lines for Kvaerner Pulping – one in
China, which is the biggest in the world,
and the other in Chile.
After a number of difficult years our
building services division is now in better
shape, with the downsizing of the business
completed at the end of 2004 and we
foresee an improved market in automation.
Since its introduction in 2002 WSP Fire
has consolidated its position and with
offices in Stockholm, Gothenburg and
Malmö is now clearly established as third
in the market place. A risk management
service is now under development in the
same business unit.
The residential market has shown clear
signs of recovery especially in the
Stockholm area, where activities have
been on a very low level for some years.
WSP Architecture has been awarded the
design of an office building for the
construction company JM in Stockholm.
Public expenditure in property remains
slow but an increase is foreseen in the
health sector where WSP has been
engaged in preliminary studies for the
merger of the two large hospitals in
Stockholm, Karolinska and Huddinge.
Transport & Infrastructure
An excellent performance by our
business combined with very good
market conditions for transport and
infrastructure ensured 2004 was a most
successful year.WSP is the clear market
leader in the sector with major clients
being the Swedish National Rail and
Road Administrations.
The market for infrastructure projects in
Sweden is very promising. In early 2004
the government launched a programme
of investment in infrastructure worth £29
billion for the next ten years. Of this, £11
billion will be allocated to the
development of new railway projects and
the maintenance of existing railroads and
your Company is well placed to benefit
from this commitment.
Major projects in the portfolio include the
Western Link, a new train tunnel in
Gothenburg, and the City Line in
Stockholm, a very complex project
consisting of an interconnecting tunnel
and three underground stations, which will
provide a new line for commuter trains
under the city centre.WSP has been
awarded the work for Northern Link, a
new highway in Stockholm, which aims to
relieve the pressure of local traffic in the
city centre.WSP will do the detail design
and construction documents for the total
installation works as well as co-ordinate
and produce the basic data for decision-
making for building consultants and
contractors. Other large project wins are
Umeå Marshalling Yard and Highway E4
Enånger-Hudiksvall.
In January 2004 we acquired Inregia, with
40 employees, which is involved in
regional planning as well as performance
analysis for the public sector in Sweden
and abroad. Knowledge sharing with the
rest of WSP Sweden has resulted in a
number of joint projects in Sweden,
including a recent major project for
regional planning in Libya.
Finland
WSP Kortes was acquired on 1 March
2004.The company, which employs 130
staff, is highly rated and has a long and
favourable business record, with exports
accounting for 40% of its turnover.The
capability to provide steel construction
design for buildings in the domestic
market with a worldwide presence for
bridge and industrial steel construction
work gives us a strong market position. In
2004, the company received the structural
design award ‘Steel Structure of the Year’
for its work on the Parliament House in
Helsinki.We are pleased to report that
during the year we have won the design
for the Chenab Bridge in India.
WSP LT Konsultit, employing 135 staff, is a
significant force in the Transport and
Infrastructure sector where new
purchasing rules have been established
resulting in some uncertainty in the
marketplace. A major project win for this
Company is the design of the motorway
between Lohja and Lohjanharju for
Skanska T ekra.
By branding these businesses as WSP we
are able to provide a strong,
multidisciplinary platform for further
growth in Finland and as an entry into the
Eastern European market. Education
T op: Martin Luther King Junior Library, 
San Jose, California
This library is one of the largest to have been 
built west of the Mississippi, and the first library 
in the USA to be operated jointly by both a city 
and a university.
Middle: Centre for Auditory Research, London
The Centre, which provides state of the art facilities,
is designed to meet the stringent acoustics
requirements demanded by sensitive research
equipment, and is part of University College London
Bottom: London Metropolitan 
University, London
(Architect: Daniel Libeskind)
The building’s complex geometry with walls, 
ceilings and windows set at unusual angles called 
for an innovative approach to our design of lighting
and ductwork.
18 WSP Annual Report 2004
1. Front [91232].qxd  29/3/05  12:08 pm  Page 18 Norway
WSP’s associate company, Multiconsult,
has a strong, long term order book thanks
to projects in the oil and gas sector such
as Snow White at Hammerfest and the
Ormen Lange project in the North Sea,
as well as hospitals in Oslo and Akker.The
company’s participation in liquid natural
gas projects overseas is providing
resilience. Since 2001 the staff has almost
doubled and there are now approximately
725 employees. Growth has been
achieved through a combination of
acquisitions and organic growth and the
relatively poor performance in 2003 is
behind us with profits returning to normal
levels in 2004.
Rest of Europe
In Poland we have established a good
platform for future growth and we are
now focused on increasing business
volumes in Germany. Most of our efforts
in Eastern Europe have been in the area
of aid-financed projects where we have
been rewarded by a major project win to
reconstruct the M-22 motorway from
Novi Sad to Belgrade in Serbia.
In the longer term, Eastern Europe is
considered to be a potentially strong
market for WSP , not least on account of
the planned economic growth and inward
investment that will be stimulated by their
membership of the European Union.
United States of America
WSP USA 2004 2003
T urnover £27m £25m
Staff 389 354
Flack + Kurtz
Market conditions in the USA in 2004
showed an improvement over the
previous year. Buoyed by low interest
rates, the residential market, particularly
high-rise projects, added significantly to
our order book. In addition to gains made
in the research laboratory sector, our
New York office benefited from starting
work on major sports stadia. Public sector
work remains strong, with various
appointments in health and education.
New project wins have bolstered our
order book to an all time high, with this
expected to continue throughout 2005.
We have started work on a major
renovation of the Plaza Hotel in New York
City, and are in the initial design phase of a
new California Superior Courthouse in
San Diego, California. Additional staff and
office space are needed to execute the
upcoming workload.
Flack + Kurtz has been awarded the
prestigious VISTA award for the best
Health Care Engineering Project of the
Year for our work at the Long Island
Jewish Medical Centre in New York.The
award is from the American Society of
Healthcare Engineering and the Academy
of Architecture for Health.
WSP Cantor Seinuk
The upturn in market conditions came to
fruition during the second quarter of 2004.
A buoyant housing market, in both New
Y ork and Florida, has been supported by
our diversification into the areas of health
and education, together with the first signs
of recovery in some of our traditional
sectors such as office buildings and hotels.
Our expertise in dealing with highly
complex renovations has brought a
number of appointments during the year 
as developers look to utilise existing
structures where possible or necessary for
preservation reasons.We anticipate this
trend will continue.
We are particularly proud to have been
selected as the lead structural engineer on
the Freedom T ower, the centrepiece of the
rebuilding of Ground Zero.T ogether with
our support for the UK office in the design
of the Shard of Glass, we have underlined
our reputation as one of the world’s
leading high rise engineers.The year also
saw the completion of the superstructure
of No 7 World Trade Centre, the first
building to rise after September 11.
On 1 January 2005, the company changed
its name to WSP Cantor Seinuk.This
improves the visibility of WSP in the US
whilst retaining the local brand
synonymous with structural engineering
design excellence.
WSP Annual Report 2004  19
Operational Review – continued International Development
Top: Aid Funded Projects
With funding support from the UK Government’s
Department for International Development,WSP
team members introduce more equitable
procedures for land acquisition, redistribution and
resettlement in Bangladesh.
Middle: Construction Management
New procedures on procurement and site quality
aim to give greater value for money in construction
and maintenance works in the developing world.
Bottom: Disaster Relief
Following Hurricane Floyd,WSP was appointed to
project manage the rehabilitation of seawalls and
other coastal defences in the Bahamas.
20 WSP Annual Report 2004 WSP Annual Report 2004  21
Operational Review – continued
International
International 2004 2003
T urnover £25m £22m
Staff 622 606
Africa
Our businesses in South Africa have
continued to flourish and we have seen
consistent turnover growth resulting from
the buoyant local economy, lower interest
rates, and a stronger and more stable
currency.We have also seen an increase in
the number of projects awarded in the
rest of Africa, as well as in the number of
multi-disciplinary appointments.
Growth was achieved in all the key
sectors including building services, civils
and structures, transportation, industrial
engineering, and facilities management.We
have developed specialist disciplines in the
fields of refrigeration, wet services, fire
engineering and process control, which set
us apart from our competitors.
A number of our facilities management
contracts have been extended, and we
have been appointed on a number of
large and prestigious engineering
contracts including the refurbishment of
the 600 km N3 National Highway
between Johannesburg and Durban, the
Michelangelo Towers mixed use property
development in Sandton and the feasibility
study for the Mazagan leisure
development in Morocco.
Particularly pleasing have been the co-
operative ventures between WSP Africa
and other parts of the Group.We
worked with Norway on a project in
South Africa, with Sweden on a project
in Mozambique and with Asia and the
UK on a project in Qatar.
Whilst the economy remains buoyant, and
it has received a further boost with the
award of the 2010 Football World Cup to
South Africa, further opportunities will be
created for our businesses in Africa. Our
order book for 2005 is stronger than ever,
and is well balanced across the public and
private sectors.
Asia
The markets in Asia remain quiet
however we have undertaken a major
review of our businesses in the region and
have committed to continue with our
presence in Hong Kong and China. A new
management team has been appointed to
revitalise the business.
We believe a strategic presence in the
region is vital to support the diverse
services provided by other Group
companies to international and local clients.
The design capability in Manila has once
again proved effective in supporting other
WSP companies around the world and
the use of relatively low cost production
facilities will continue to be an important
part of the services we offer.
International Development
We have had another successful year for
development assistance or Aid funded
projects and we have been able to
enhance our core staff, expand our
geographic spread of operations and laid
the foundations for sustainable success in
2005 and beyond.
Notable large contracts won in the year
include a regional and urban planning
project and a water supply project in
western Libya, a project to restructure the
Public Works Department and undertake
an asset inventory survey in the Turks and
Caicos Islands and a technical assistance
project to the Road Agency Formation
Unit in Uganda.
At the beginning of 2004 we opened an
office in India to penetrate the large
development assistance and domestic
markets and are now pursuing a stream of
significant highway, airport, development,
stadia and buildings opportunities.
Our two businesses based in Sweden and
the UK have been developing a close
working relationship and we have now fully
integrated these businesses into a single
management structure which we believe
will be a more robust, focused and efficient
organisation, better able to provide the
services that our clients require. 22 WSP Annual Report 2004
Urban Regeneration
Top: Wandsworth Riverside, London
(Client: Persimmon)
WSP took an entirely different approach to this
difficult site which had lain undeveloped for ten
years, by demonstrating and enhancing transport
accessibility.
Middle: Paradise Street, Liverpool
WSP are working on the Paradise Street
Development for Grosvenor, which is currently the
UK’s largest urban regeneration scheme.
Bottom: Transport Planning
We are the UK’s leading provider of advice on
transport planning for the private property
development sector. WSP Annual Report 2004  23
Environmental
WSP Enviromental 2004 2003
T urnover £36m £34m
Staff 572 500
The Environmental business has continued
to perform well with the recruitment of
many talented senior managers and a
further enhancement in profit margins.
Strong progress has been made in
developing international projects and global
framework agreements for blue chip
organisations. In response to client needs
we now have staff working in Cape T own
and Sydney, and will be opening offices in
Italy and Dubai.We have also acquired a
small business in Finland and Estonia with
strong global expertise in energy supply,
carbon management and trading.
The strategy to structure and focus the
business on unlocking value both in
domestic markets and also in the
emerging global market, is delivering the
expected returns.With market leading
business in the UK, Scandinavia and South
Africa and with projects undertaken in
over 50 countries in 2004, the business is
committed to developing new markets
where environmental legislation is starting
to bite. Our work with ANZ Bank and
Westpac Bank in Australia in respect of
their corporate response to
environmental and social issues has been
acknowledged as being market leading.
The market for consultants able to
support global companies in legal
compliance, best practice reviews and risk
management is showing strong growth
and our appointment as global framework
consultants for Smiths Industries, Archon
(part of Goldman Sachs) and Seagate is
testament to the success of our global
client facing structure.
The introduction of senior staff through
successful recruitment has also been 
a highlight in the year with the US,
South Africa, the Middle East, and Finland
all being strengthened at the highest
levels of management. Our work with
Ithaca College in North America has
been endorsed by Senator Hilary
Rodham Clinton and the profile of the
business continues to strengthen with
such key flagship projects being
successfully executed.
Our specialist remediation company
continues to impress with strong profit
margins in a growth market.To date we
have focussed this strategy on establishing
a market leading position in the UK. Our
Swedish business has continued its strong
relationship with the Swedish Petroleum
Institute Remediation Fund that procures
services in contaminated land assessment
and clean up. In South Africa we have
developed the leading contaminated land
consultancy and the country’s first major
brownfield regeneration project and
contamination clean-up project was
awarded to our Cape Town office.
Our Environmental business will focus on
developing international opportunities and
establishing a capability in other
jurisdictions.The most significant
international opportunities for this
business are the Middle East, Europe and
Africa where the oil and gas sector is
becoming an increasingly dominant
contributor to our revenues.
We are also experiencing progress with
initiatives such as the ‘Active Transfer’
solution launched in 2003. Remediation
work is often procured with an element
of risk transfer and the combination of
consulting with specialist turnkey remedial
solutions is increasingly viewed as a pre-
requisite by clients seeking solutions based
management consulting.
Expansion into Mainland Europe
continues with operations now
established in Milan, Poland, Estonia 
and Romania.We are pleased with the
diversity that we see in this business 
with the Milan office undertaking energy
and carbon management work for the 
oil and gas sector, whilst in Romania we
are developing environmental policy 
and regulation with the Government 
as they prepare for accession to the
European Union.
Our developing track record in energy
related services is being led by the world
class experts that are present in our
Scandinavian operations.The Swedish
business in conjunction with professionals
in the UK is developing energy
masterplans for several new cities in
China.The requirement to issue energy
labelling and certification for commercial
property in Europe has tremendous
potential for this part of our business and
in Scandinavia we are developing related
policy on behalf of Government. In Finland
we have delivered a joint implementation
project under the Kyoto protocol where
approximately 0.5 million tonnes of
emission reduction credits have been
released.This will result in one of the
largest carbon trading deals in Europe.
In Saudi Arabia we are advising on energy
policy as part of a larger project on behalf
of the Government to develop policy and
regulation for environmental protection.
Increasingly we see our governmental
clients in South Africa, Romania, Bulgaria,
Sweden and Finland seeking our advice
on issues of energy supply and demand
and associated air quality.
It is our stated intent to move our
business up the value chain and our
work with Sainsburys, BAA,Vishay
Siliconix, and Applied Materials
developing environmental, health and
safety policy, social responsibility and
management systems only serves to
demonstrate the progress we are making
in positioning ourselves in this value
added market place.
Our environmental business is now well
positioned to capitalise on the growing
global marketplace for environmental,
social, health and safety consultancy
alongside specialist remediation solutions.
Operational Review – continued The WSP Vision is to be the 
outstanding supplier of specialist and
integrated services to the built and
natural environment.
To fulfil this vision all WSP activities are
centred around the core values of trust,
sharing and supporting, pride and passion,
sustainability and innovation.Together
these create the platform from which
WSP is building future growth through
the provision of quality, well-managed
multidisciplinary services to clients and
making use of global reach and knowledge
as well as local relationships.
The cornerstones on which our vision
and values are based will ensure that the
quality of services, products, relationships,
management and people are developed
and maintained at the highest level.
We will aspire to continually grow both
organically and through acquisitions,
maintaining resilience through
diversification and increased efficiency.
Our core disciplines will continue to be
built and extended to achieve effective
globalisation.We will recruit and develop
staff who are outstanding, commercially
aware professionals and we will
continually drive a client focused culture
in order to grow and sustain quality long-
term relationships.
Shareholder value is enhanced by the
emphasis we are placing on our vision
and core values, which help to define 
the culture of the Group.This in turn
motivates our staff to give their best 
and instil in our clients confidence that
we will deliver solutions of the very
highest quality.These may comprise
specialist services from the many fields 
of activity that we offer, or multi-
disciplinary packages as part of an
integrated approach.
Our Goals
WSP’s global objective is to promote the
interest of all stakeholders to ensure that
we deliver enhanced shareholder value,
whilst being the first choice for both
clients and employees.
We will aim to be best rated performer
in our sector and to be in the top three
providers geographically in each of our
core disciplines.We wish our clients to
perceive WSP as a high quality,
innovative, sustainable and outstanding
supplier with a strong brand and good
market penetration. In meeting these
aims we will retain and promote our
entrepreneurial culture whilst always
ensuring that our core activities provide
a solid platform for our operations.
Sustainability
In WSP we consider the principles of
sustainability to be entirely consistent
with delivering long term shareholder
value. Operating in the service sector,
WSP is dependent upon the support
and goodwill of its clients, partners,
investors, staff and wider communities
within which we operate.The Group
aims to enhance its relationships with
those stakeholders to ensure that the
business continues to respond to and
fulfil their expectations.We aim to
develop opportunities in conjunction 
with our stakeholders, and have
established systems and procedures to
monitor delivery.
As a global business, we are challenged
by the diversity of cultures and legislative
requirements that we must satisfy.
Nevertheless, we have proven that our
business model, underpinned by our
vision and values, can be delivered
internationally.This has been achieved
through high level policies and
appropriate delegation through
management autonomy that allow our
businesses to respond effectively to local
requirements and conditions.
We are highly aware of the interactions
that occur between the stakeholder
groups.We aim to deliver our vision, and
to develop capital with all stakeholders
by leveraging our relationships and
building our brand reputation, ensuring
that we understand, anticipate and
respond to potential risks, whilst seeking
to achieve reasonable balance in the
Creating Sustainable Value for Stakeholders
24 WSP Annual Report 2004 sometimes conflicting requirements of
our stakeholders.
In assessing the interests of our
stakeholders, we are conscious of their
concerns and develop our understanding
from direct communications with
individuals, through surveys, and through
the work of pressure groups and other
non-governmental organisations.
Clients
WSP’s vision is to be the outstanding
supplier of specialist and integrated
services in the built and natural
environments.We are passionate about
client service, and aim to develop long-
lasting, sustainable relationships by
exceeding expectations, earning respect
and developing trust.Within our various
sectors, we consider our clients to be not
only the end-users of our products and
services, both present and future, but also
the other participants who contribute
through the supply chain networks and
teams in which we operate.
We aim to provide clients with effective
technology-based solutions that fulfil their
aspirations, with innovation and research
being fundamental to providing clients
with added value.
In order to ensure client satisfaction, we
have established systems and quality
assurance procedures throughout the
Group with the objective of monitoring
project delivery to help ensure that we
deliver projects as intended.These include
quality systems that are certified to ISO
9001.We further monitor client
satisfaction through a number of other
mechanisms including client satisfaction
surveys.
We recognise the risks associated with
under-performance and poor quality
service and products. Not only can these
undermine client relationships but may
lead to claims.While we aim to avoid
such situations arising, we maintain
professional indemnity insurance to
manage the risk.
Staff
A separate report on ‘Our People’ is
included on pages 28 and 29.This includes
an overview of our approach to
recruitment, knowledge management,
training and development. It is an
objective to improve staff retention to
protect and develop the skills and
knowledge embedded in our staff.
We take responsibility for the safety and
health of our staff and those who come
into contact with the Group. Our systems
are intended to match, if not better, the
minimum legal requirements of the
countries in which we operate. An
example is the UK where we have been
awarded a ROSPA Gold Award for our
Health and Safety management systems.
We work in many parts of the world
which have different attitudes to human
rights and equal opportunities.We aim to
work within the laws and regulations of
these countries, and do not knowingly
breach these principles. In South Africa,
for a number of years, we have
implemented Affirmative Action
procedures in line with equal
opportunities requirements and also
actively support a number of Black
Empowerment Enterprises.
By employing skilled staff, predominantly
based in modern offices, we consider that
the risk of breaches to Human Rights or
Equal Opportunities is minimal.
Society
There are two principal areas of concern
that we identify through our interactions
with society in general, and the
communities in which we operate.We
seek to address the environment and the
social impact of our work. Our impact in
these areas can be both direct and
indirect, reflecting the effects of our
operations and the effects of the projects
we deliver for our clients.
The Environment 
We consider that the environmental risks
directly associated with the Group’s own
operations are relatively limited in their
potential impact. As a service business, our
main environmental impacts are generally
restricted to energy and raw materials
such as stationery. In conjunction with
ongoing programmes to improve
Group Policy Statement
WSP strives to contribute to
economic, social and sustainable
development in its host countries.
The Group respects the human
rights of people affected by its
operations and seeks to stimulate
the enhancement of local capacity
in its host countries.
In particular:
 WSP does not discriminate due to
gender, age, ethnic background,
religion, colour or political opinion;
 WSP’s aim is to implement where
possible suitable methods that will
ensure effective transfer and
distribution of knowledge and
technique;
 WSP strives to perform
development work in host
countries to meet local needs;
 WSP strives to consider health and
safety in its assignments as well as
perform its work to secure
sustainable development;
 WSP will regularly publish relevant
and reliable information about the
company, its structure, and financial
results;
 Where third parties are involved,
WSP will act in accordance with
the market and promoting good
practice;
 WSP aims to avoid corruption or
bribery by conducting its affairs
effectively, and without creating
restrictions to free trade or
competition; and 
 WSP supports the public finances
of its host countries by fulfilling its
statutory and taxation obligations in
proper time.
WSP Annual Report 2004  25 Creating Sustainable Value for Stakeholders – continued
efficiency and reduce waste,WSP has
introduced initiatives that include:

Use of materials from sustainable
sources,

Recycling office waste,

Use of modern, energy efficient offices,

Energy saving office equipment, and

Incentives for alternative means of
transport other than cars.
Of even greater significance to the
Environment are the indirect effects of 
the services that we provide. Our
environmental consultancy specialises in
providing environmental solutions to
clients.We act at all levels. At a national
level we inform Government policy and
develop energy master plans and carbon
emission models for cities. At the
corporate level we provide a range of
services that range from sustainability
management to environmental auditing,
from remediation of contaminated land to
corporate social responsibility.WSP is
committed to providing solutions and
applying skills and knowledge to improve
the Environment globally.
In other areas of the business, in the
property and transportation sectors, we
also advise clients on sustainable
solutions that can minimise the
environmental impacts of their schemes.
We undertake many of our property
projects in the UK according to the
British Research Establishment’s
Environmental Assessment Methodology
(‘BREEAM’).These include the new Royal
Bank of Scotland World Headquarters in
Edinburgh which was awarded BREEAM’s
highest score of excellent. Our work in
the USA has been highly acclaimed, with
buildings such as the Donald Bren School
of Environmental Sciences and
Management, part of the University of
California being recognised by the award
of a Platinum LEED® certification, the
highest award of the United States
Green Buildings Council. In
Transportation, we aim to improve
transport integration and reduce
congestion, while responding to the
wider environmental concerns associated
with road and rail schemes.
We have implemented Environmental
Management Systems in many of our
offices, and have achieved certification to
the International Standard, ISO 14001, for
around 60% of our operations.
Social Impact
We are required to directly consider the
risks to the business that can arise
through inappropriate employment or
ethical behaviours towards others. As a
knowledge-based consultancy, largely
operating in an office environment with
many professional staff we believe the risk
of breaches to human rights is generally
low. However, there may be a moderate
risk of bribery and corruption in certain
parts of the world in which we operate,
and we seek to mitigate this risk through
a combination of effective financial
controls and management oversight.
Indirectly, through our work for clients we
are able to influence communities by
improving infrastructures and general
living conditions. Our work in
infrastructure, urban regeneration, health,
26 WSP Annual Report 2004
The Donald Bren School of Environmental
Sciences and Management, University of
California – awarded Platinum LEED®
certification by the United States Green
Building Council.
The 85,000 gsf facility provides
laboratory, office, teaching and research
spaces, and includes the following
notable features that contributed to
Platinum LEED® certification

Energy reductions that collectively
exceed California Title 24 by more 
than 30%

Development of advanced glazing,
wall and roof solutions

Natural ventilation optimised 
to eliminate air conditioning 
within offices

Innovative laboratory variable 
ventilation system

Extensive daylight control

Optimised lighting features

Control system that provides
optimisation of chilled water,
operating as a ‘virtual plant’

Rooftop photovoltaic array
interconnected to building 
electrical system

Complete use of reclaimed water for
irrigation and toilets

Waterless urinals throughout

Infrastructure for future fuel cells
1. Front [91232].qxd  29/3/05  1:36 pm  Page 26 education, transportation and other
sectors helps build stronger communities,
by developing services, and improving
living standards. By focussing our skills on
a sector-led basis we are able to relate
more closely to the needs of end users
and to concentrate on developing and
implementing best practice within our
projects for the benefit or our clients and
the communities that they serve.
WSP Environmental provides clients with
sustainability solutions that include
Corporate Social Responsibility and
Product Responsibility services. One of
our initiatives is Real World Training which
provides staff development and
Corporate Social Responsibility solutions
with the object of helping clients to foster
a more effective work environment, and
enhance individual leadership skills, team
work and staff loyalty.The service includes
experiential learning programmes based
upon community projects in developing
parts of the world that embrace
infrastructure development, skills transfer
and economic sustainability.WSP has run
a number of such projects in South Africa,
including an irrigation project, a market
garden and an internet cafe owned and
operated by a rural community.
Internationally, we work with world aid
organisations to develop infrastructure
and strategy in many of the world’s
deprived areas, improving conditions and
economic prospects.
Governments
As a global contributor, we aim to add
value to those countries in which we
operate.We contribute through the
employment of local staff, through
delivery of projects and through payment
of taxes.We aim to comply with the laws
and regulations of the countries which
host us and in which we operate.Where
appropriate, we seek to inform
governmental policy and interpretation as
global technology and practices develop.
It is not WSP policy to make political
donations or donations to parties or
institutions whose prime function is to
fund political parties or their candidates.
Regulators
In many of our areas of operation, best
practice and minimum standards are set
by regulators and professional
organisations who may not enjoy legal
backing. As well as ensuring that our
projects and working practices comply
with regulations, we also liase with
regulators, supporting the development of
new technology and practices.
Suppliers
It is the efforts of our own staff that
represent the major input to our delivery
of projects on behalf of clients, and WSP
has no significant reliance on single
sources of supply. In our dealings with
suppliers, we aim to:
 Be fair, open and honest in our dealings
 Agree terms and conditions, and to
comply with them, and
 Address any safety or health matters
where we have such responsibility
We have established systems and
procedures for procurement, invoice
processing and payment which are
intended to ensure that we honour 
these commitments.
Shareholders
We believe that only by ensuring effective
relationships with all our stakeholders can
we deliver long term value and
satisfaction to our shareholders.We have
established systems of Corporate
Governance in line with the Combined
Code of the UK Listing Authority, and a
report on Corporate Governance is set
out on pages 37 to 40.
The Board takes account of risks and
regularly reviews the Group’s systems of
internal control.These include Social,
Environmental and Ethical (‘SEE’) risks
which can have differing impacts, reflecting
the dynamics of the business.The potential
likelihood and impact of significant risks,
including SEE risks, is subject to internal
controls and monitored and assessed by
the Board using a combination of
quantitative and qualitative measures.
Certain directors have received training in
SEE risks. As outlined in the Remuneration
report on pages 41 to 44, the executive
directors are incentivised to ensure
sustainability through long term incentive
share plans that reward them for the
longer term performance of the Group.
No imminent SEE risk that will have a
material impact on the Group has been
identified, and no significant failure in
policies or procedures for managing SEE
risks has been identified.The Board’s
review of risk management and systems
of internal control that is reported on
page 39 of the Corporate Governance
Report includes consideration of
significant SEE risks.
The Future
WSP recognises its responsibility to
stakeholders and has established systems
that recognise, manage and control the
significant risks and opportunities that
could influence future sustainability.We
consider that maintaining and developing
a sustainable business is fundamental to
the success and integrity of the Group.
During the next year we will re-enforce
our communications of the principles and
policies relating to sustainability to our staff
and, in doing so, will aim to further embed
the vision and values that define our
culture.The sustainability agenda is one
that continues to develop, and we will
continue to monitor developments and
address the implications for our systems of
management and reporting.We recognise
areas where our systems of reporting,
monitoring and consultation may be
improved, and we will develop these.
We will aim to ensure the balanced
satisfaction of all our stakeholders, to
develop our reputation and establish long
term relationships. Only by doing so can
we be confident of fulfilling our vision to
be the outstanding supplier of specialist
and integrated services in the built and
natural environment.
WSP Annual Report 2004  27 Our People
WSP’s employees are our greatest asset
and it is our ambition to become the
employer of choice, attracting the best
staff to support our vision of being the
outstanding supplier of specialist and
integrated services.
To achieve this WSP provides a global
working environment in which the focus is
on developing and supporting our staff
through a continuous programme of
recruitment, training, staff care and
attractive remuneration packages where
cultural integration and knowledge sharing
are actively supported.
At the year end our staff numbered 5,300,
with an average period of employment of
7 years. Of these 2,463 were graduates,
whilst many other employees have
relevant technical qualifications.
Knowledge Management
In WSP the knowledge, experience and
expertise of our staff is our most valuable
resource.The size and framework of the
global organisation brings benefits from
economies of scale in terms of sharing
knowledge and making information and
expertise globally available.
Effective knowledge management is 
an essential component in increasing
opportunities for cross selling both
regionally and globally, leading to
increased business and a greater market
share as well as enhanced brand
recognition and reputation.
Knowledge sharing is achieved in many
ways. International transfers enable staff
to gain overseas experience by providing
additional support in offices or on
projects where resources or certain 
skills are lacking.
Staff with similar skills team up to
exchange knowledge and share
experiences, which encourages the
benchmarking of good practice as well as
the development of new services. Project
teams may be drawn from more than one
country to co-operate on individual 
Employee Age Profile
Employees by Role
Length of Service
28 WSP Annual Report 2004 projects thus combining global experience
with local delivery and older experienced
employees are encouraged to share their
knowledge with younger staff.
We continue to invest in infrastructure to
support knowledge management. Early in
2005 a global CV and competence
database will be launched, covering the
majority of the staff in the company,
sorted by education, skills, region or sector.
Successful implementation of such tools is
dependent upon global access to WSP’s
corporate systems. In 2004, much work
was done on developing a common IT
standard throughout the Group to
provide an improved platform for
facilitating the sharing of information and
the transfer of knowledge.
Recruitment
Recruitment and retention of high calibre
staff is crucial to WSP’s continued success
in an increasingly competitive market.The
Group is actively pursuing a policy of
‘recruit for attitude, train for skill’, aiming
to select individuals whose actual or
potential professional competence is
enhanced by commercial awareness and 
a flair for business.
Considerable efforts are made to attract
new graduates, of which some 100 are
recruited annually worldwide. Intensive
recruitment campaigns target this group
in the face of stiff competition from
other companies in the sector.These
campaigns also present an opportunity
to gain long term awareness for the WSP
brand amongst the industry’s high fliers
of the future.
Employee Survey
In 2004 our annual employee survey was
extended globally.The overall response
from our staff was extremely positive,
with an overall satisfaction rate of 71%.
Particularly pleasing was the fact that 69%
of staff said that they understood the
company’s Vision and Values.
The survey also highlighted areas for
improvement, such as the requirement for
the Group to provide greater
opportunities for career progression.
Following analysis of the results of the
survey, global and individual company
goals for improvement were identified,
which include appraisals and career
development, knowledge sharing on a
global level and the communication of
Vision and Values at a local level.
Training and Development
Training and development linked to
positions and career progression play an
important role in retaining good staff.
Annual appraisals for all staff throughout
the Group provide feedback and assist
in drawing up programmes for
continuing professional education which
includes appropriate project experience
as this is the key to the development of
skills and expertise.
The WSP University is now fully
operational in Sweden, the UK and
Environmental providing staff with
opportunities to develop business,
technical, personal and procedural skills. It
gives structure and accessibility for all to
take full advantage of the training
opportunities available.
This year there was specific emphasis on
leadership skills. In the UK courses were
held for middle management, whilst in
Sweden the focus was on middle
management as well as on more
strategic leadership skills. Induction
programmes across the Group were
very successful and greatly appreciated
by new staff.
2004 saw the tenth anniversary of
Taskforce, which encourages young people
to develop their skills and understanding
of the business through undertaking
strategy related research, presentations
and workshops on matters of importance
to the Group. At their conference in
October Taskforce members from around
the world met in London to consider
WSP Vision and Values and this gave rise
to many innovative and workable
suggestions for ensuring clients see the full
benefit of all we do.
WSP Annual Report 2004  29 Board of Directors
Caroline Brown FCMA MBA
Independent Non-Executive Director
Age 42, Caroline was first appointed to
the Board in 2003. She is a finance
professional with executive and advisory
experience in diverse industry sectors.
She was the Director of Finance Change
at Norwich Union Insurance, part of Aviva
plc, having previously been Chief Financial
Officer with an AIM quoted software and
services company. Caroline has UK and
international banking experience as
Director of Corporate Finance with UBS
and HSBC. She is a qualified accountant
and brings particular experience in finance
and risk to the Board, and chairs the WSP
Audit Committee.
Shareholding: Nil.
Malcolm Paul FCA
Group Finance Director 
and Company Secretary
Age 53, Malcolm was first appointed to
the Board in 1987 at the time of the WSP
IPO. After qualifying as a chartered
accountant, Malcolm worked in both
practice and industry before joining
Longcrofts, a city accountancy firm as a
partner specialising in corporate finance.
He became Finance Director of WSP in
1987. He is a principal member of the
performance and strategy committees and
is responsible for the financial control of
the Group. Malcolm maintains links with
the Group’s professional advisers and
during the year has renegotiated the
Group’s long term borrowing facilities.
Shareholding: 822,976
David Turner FRICS 
Non-Executive Chairman
Age 67, David was first appointed to the
Board in 1997. He was chief executive of
Barclays Property Holdings Limited from
1991 to 1997 and a divisional director of
Barclays Bank. He is also Vice Chairman
and Deputy Pro-Chancellor of the City
University, and is a director of a number
of private companies. David has a wealth
of knowledge of the property industry
and has broad business experience. He
was appointed Chairman of the Board 
in 2003 and he also chairs the
Nominations Committee.
Shareholding: 10,910
30 WSP Annual Report 2004 Christopher Cole 
C Eng FCIBSE MASHRAE
Chief Executive
Age 58, Chris was first appointed to the
Board in 1987 at the time of the WSP
IPO. Following initial training and
education, Chris spent the first ten years
of his career working for a major
contracting and subsequently consultancy
business. He joined WSP in 1972 at its
inception, becoming Managing Director in
1987 and Chief Executive in 2001. He
chairs the Performance and Strategy
Committees and is responsible for both
operational control and the strategic
direction of the Group. Chris maintains
significant client contact together with
regular liaison with our offices around the
world. He is also a non-executive director
of Ashtead Group plc.
Shareholding: 908,777
Christopher Stephens MA
Senior Independent Non-Executive Director
Age 56, Chris was first appointed to the
Board in 2003. He has many years
experience in a range of industries
including Consumer, High Technology and
Business Services. Until recently he was
the Group Human Resources Director of
Exel plc, the global logistics company, and
prior to that with Vivendi in the UK. As
well as experience of motivation and
incentivisation of large international
service companies, Chris has had general
commercial experience both in the UK
and globally and he chairs the WSP
Remuneration Committee.
Shareholding: 5,000
Thomas Erséus MSc CEng
Executive Director and 
Chairman of WSP Europe
Age 41,Thomas was first appointed to
the Board in 2001 following the
acquisition of WSP Sweden. After
qualifying as a civil engineer,Thomas
joined Caran AB, a Swedish consultancy
firm as a consultant. Having been
instrumental in introducing the company
to the Swedish Stock Exchange in 1995,
he became Managing Director in 1997. In
1998,Thomas joined WSP Sweden as
Managing Director, becoming Chairman of
WSP Europe in 2002. He is a principal
member of the performance and strategy
committees and is responsible for the
operational performance of WSP Europe.
He is also on the Environmental and
International Boards.Thomas is a director
of our associate company, Multiconsult
Holdings AS and holds two non-executive
appointments with Hagstromer & Qviberg
AB and DSV Miljo AS.
Shareholding: 352,200
WSP Annual Report 2004  31 04 02
03 01
06
05
Performance Committee
01Rikard Appelgren MSc
Managing Director WSP Sweden
Age 39. After working as an
engineering consultant and contractor
in Sweden and Germany, Rikard joined
WSP Sweden in 1996, becoming
Managing Director of Construction
Design in 1998, and Managing Director
of WSP Sweden in September 2002.
02Stuart McLachlan MSc
Managing Director WSP Environmental
Age 37. Having worked as an
environmental consultant, Stuart
joined WSP in 1995, becoming
Managing Director of WSP
Environmental UK in 1997. In 2001 
he was appointed Managing Director
of WSP Environmental for their 
global operations.
03Mike O’Brien CEng
Managing Director WSP UK
Age 57. Mike has over 35 years
experience with contractors and
consultants in the planning, design and
construction of civil and structural
projects. He joined WSP in 1979,
becoming Managing Director of WSP
UK in 2000.
04Siv Axelsson MBA
Group Human Resources and
Communications Director
Age 51. Siv has broad management
experience with a variety of
organisations and has published several
books addressing the management of
intellectual businesses. She joined WSP
Sweden in 1995 and was appointed
Group Human Resources and
Communications Director in 2002.
05Randy Meyers PE
President and CEO Flack + Kurtz Inc.
Age 48. Originally specialising in
Electrical Engineering, Randy joined
Flack + Kurtz in 1984. He was
appointed President and CEO of Flack
+ Kurtz in 2002.
06Andrew Mather Pr Eng,
BSc Eng, B Com
Managing Director WSP South Africa
Age 46. Andrew is an electrical
engineer who specialises in industrial
process control systems. He joined
WSP as Managing Director of WSP
Group S.A. in 1999, when WSP
acquired the WEVS Group.
32 WSP Annual Report 2004 WSP Annual Report 2004  33
The directors have pleasure in presenting their report together with the audited financial statements for the year ended
31 December 2004.
Principal Activity
WSP Group plc is an international business supplying specialist management and integrated services in the built and natural
environment.
Review of Business
The results for the Group are set out in the consolidated profit and loss account on page 46.
Details of the Group’s operations and its future prospects are contained in the Chairman’s statement, the Chief Executive’s Review and
the Group Finance Director’s Review on pages 2 to 11.
Dividends
The directors propose a final dividend of 3.2p net per share, which, together with the interim dividend of 2.1p net per share paid in
October 2004, gives a total dividend of 5.3p (2003: 5.0p) for the year. If approved at the Annual General Meeting, which is convened
for 3 May 2005, the final dividend will be paid on 12 May 2005 to shareholders on the register of members at the close of business
on 15 April 2005.The shares will be ex dividend from 13 April 2005.
Acquisitions
During the year the Group acquired Inregia Intressenter AB, Consulting Kortes OY and EMP Projects OY, details of which are set out
in note 20 to the financial statements.
Share Capital
As at 31 December 2004, the issued share capital of the Company comprised 60,458,607 (2003: 60,445,286) ordinary shares of
5p each. During the year 13,321 shares were issued in respect of deferred consideration at an issue price of 209p.
At the Annual General Meeting held on 11 May 2004 a resolution was approved to authorise the Company to make market
purchases of up to 10% of its own ordinary shares.The power given by this resolution will only be exercised if the directors are
satisfied that any purchase will increase the earnings per share of the ordinary share capital in issue after the purchase and therefore
is in the best interest of the shareholders.
At the same meeting a resolution was approved to renew the directors’ authority to allot relevant securities pursuant to Section 80 of
the Companies Act 1985 up to an aggregate nominal amount of £477,736 and to dis-apply the statutory pre-emption provisions of
Section 89 of the Companies Act 1985 in respect of any rights issue and for cash issues up to an aggregate nominal amount of
£151,113. Similar resolutions will be proposed at the forthcoming Annual General Meeting on 3 May 2005.
Articles of Association
At the Annual General Meeting, the directors propose to seek shareholder approval to adopt new Articles of Association to enable it
to benefit from the introduction of the Electronic Communications Act 2000, the Uncertificated Securities Regulations 2001 and the
Companies (Acquisition of Own Shares) (Treasury Shares) Regulations 2003. Additionally, under the terms of the current Articles one
third of the directors are required to retire by rotation at an Annual General Meeting and it is proposed that the new Articles should
require that directors retire by rotation on the third anniversary of their appointment.This will enable the Company to appoint
directors for a specified term of three years. It is also proposed that the new Articles increase the limit placed on the aggregate
amount of fees payable to the non-executive directors from £100,000 to £250,000.This will enable the Company to appoint additional
non-executive directors without exceeding the limit, while also providing scope to increase fees to reflect commitment and time
requirements. Furthermore, the proposed new Articles allow for the indemnification of alternate directors on the same basis
as directors.
Directors’ Report Directors’ Report – continued
34 WSP Annual Report 2004
The decision to seek approval to adopt new Articles of Association rather than to seek approval to amend the Articles has been taken
on the basis of legal advice, and consequently the resolution combines all of the above proposals.
Detailed explanations of the proposed amendments to the Articles of Association are provided in the Notice of Meeting which
accompanies this report.
Research and Development
To enable WSP to deliver innovative solutions, we maintain research links in many areas that make it possible for us to apply some of
the latest technical solutions to the benefit of our clients.The sharing of knowledge and innovations is encouraged through the use of
the Group intranet and other staff communication.
Directors
Details of Board Committees, directors’ roles and responsibilities are set out in the Corporate Governance Report on pages 37 to 40.
The directors who served during the year were:
David T urner Chairman
Christopher Cole Chief Executive
Malcolm Paul Group Finance Director
Thomas Erséus Executive Director
Christopher Stephens Senior Independent Non-executive Director 
Caroline Brown Independent Non-executive Director
In accordance with the Company’s Articles of Association, David Turner and Christopher Cole will retire by rotation at the Annual
General Meeting, and being eligible, offer themselves for re-election. Christopher Cole has a service contract with the Company that
requires a one-year rolling notice period. David Turner, as a non-executive director, is appointed for a three-year period, which may be
terminated by three month’s written notice given by either party. During the year, both Christopher Cole and David Turner have
undergone performance evaluations and continue to contribute effectively and demonstrate commitment to their roles. Biographical
details are set out on page 30 and 31.
Details of directors’ interests in shares and share options are set out in the Remuneration Report on pages 41 to 44.
Other than their service contracts, no director had a material interest in any contract of significance to the Group’s business. David
Turner is Vice Chairman and Deputy Pro-Chancellor of the City University and a director of the Royal Mail Group Property Board.
Christopher Stephens was Human Resources Director of Excel plc and Caroline Brown was director of Finance Change with Norwich
Union Insurance. During the year these businesses have occasionally procured services from the Group.
During the year the Company maintained liability insurance for its directors and officers.
Employees
The success of the business depends upon maintaining a highly qualified and well-motivated work force and every effort is made to
achieve a common awareness of the financial and economic factors affecting the performance of the Group.
Regular communication with all employees is essential and this is achieved by formal and informal meetings, through national intranets,
the global internet, and through the distribution of in-house magazines.
WSP is a committed equal opportunity employer and engages employees with broad backgrounds and skills.Within the limitations of
its business, the Group’s policy is to engage disabled persons and to provide training, career development and promotion opportunities
within standard terms of employment. It is also WSP’s policy to retain and re-train those employees who have become disabled.
A report on Our People can be found on pages 28 and 29.
Supplier Payment Policy
As a service company WSP’s principal cost base is its employees who are paid weekly or monthly in arrears. Many other costs, such as
office rents and insurance, are paid in advance. In addition, in common with other businesses in the construction sector, sub-consultants
who provide support or specialist services on projects operate on a paid when paid basis. WSP Annual Report 2004  35
The terms and conditions of payment for the supply of other capital and revenue items are normally agreed with the supplier.
However, subject to regional practices, and in the absence of any such agreement it is our policy to make payment 60 days after the
end of the month in which the supplier’s invoice was received.
The average number of days credit taken by the Company for trade purchases at 31 December 2004 was 52 days (2003: 51 days).
Social Responsibility
A report on creating sustainable value for stakeholders which includes details of social responsibility may be found on pages 24 to 27.
Donations
During the year the Group made charitable donations of £31,127 (2003: £49,535) principally to local charities serving the communities
in which the Group operates. No political donations were made (2003: £Nil).
European Monetary Union
As the Euro has not been introduced either in the United Kingdom or Sweden, the two largest geographical markets in which the
Group operates, the impact of the currency has been minimal.
However, the Group’s strategy continues to be to build a broad European business, and as this brings greater exposure to the Euro
appropriate systems are being developed. It is not anticipated that there will be a material impact on WSP , which will continue to
report results in Sterling.
Substantial shareholdings
At 4 March 2005 the directors had been notified of the following substantial interests in the ordinary share capital of the Company:
Number
of Shares Percentage
Aviva plc 6,752,432 11.17%
Henderson Global Investors 5,282,877 8.74%
Standard Life Investments Ltd 2,544,839 4.21%
Legal & General Group plc 1,829,102 3.03%
Barclays PLC 1,823,807 3.02%
Statement of Directors’ responsibilities for preparing financial statements
Company law requires the directors to prepare financial statements for each financial year that give a true and fair view of the state of
affairs of the Company and the Group and of the profit or loss of the Group for that period.
In preparing those financial statements the directors are required to:
●
Select suitable accounting policies and then apply them consistently
●
Make judgements and estimates that are reasonable and prudent
●
State whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the
financial statements.
The directors confirm that they have complied with the above requirements in preparing the financial statements.
The directors are responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial
position of the Company and the Group to enable them to ensure that the financial statements comply with the Companies Act 1985.
They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities.
The directors are also responsible for the maintenance and integrity of the Group’s website on the internet; however information is
accessible in many different countries where legislation governing the preparation and dissemination of financial statements may differ
from that applicable in the United Kingdom.The responsibilities of the Auditors are set out in the Auditors’ report on page 45. 36 WSP Annual Report 2004
Directors’ Report – continued
Going concern
The directors believe, on the basis of current financial projections and facilities available, that the Company and the Group have
adequate resources to continue in operation for the foreseeable future. For this reason the directors continue to adopt the going
concern basis in preparing the financial statements.
Auditors
A resolution to reappoint PricewaterhouseCoopers LLP as auditors to the company will be proposed at the Annual General Meeting.
By Order of the Board
Malcolm Paul
Company Secretary
4 March 2005 WSP Annual Report 2004  37
Corporate Governance Report
In accordance with the Listing Rules of the Financial Services Authority, the Company is required to:
●
explain how it applies the main and supporting principles of the 2003 FRC Combined Code on Corporate Governance, and
●
confirm whether or not it complies with the Code’s provisions or, where it has not, to provide an explanation.
Directors
The Board of WSP Group plc is collectively responsible for the success of the Group and for its Corporate Governance and aims to
provide entrepreneurial leadership of the Group within a framework of prudent and effective financial controls that enable risk to be
assessed and managed.
As outlined on pages 30 and 31, the Board comprises the non-executive Chairman, three executive directors together with two
independent non-executive directors.The Combined Code identifies the fundamental importance of independent non-executive
directors in ensuring the objective balance of the Board, and sets out criteria to be considered in determining the independence of
non-executive directors. In accordance with Provision A3.1 of the Code, the Board considers Christopher Stephens and Caroline
Brown to be independent non-executive directors, with Christopher Stephens being the senior independent non-executive director.
WSP has taken advantage of the exemption provided by the Combined Code, where companies fall outside the FTSE 350, which
permits Audit Committees, Remuneration Committees and Boards to comprise a minimum of two non-executive directors.
To ensure its effectiveness, the Board’s composition brings together a balance of skills and experience appropriate to the requirements
of the business. Board composition and recommendations for the appointment of directors are dealt with by the Nominations
Committee and its activities are set out separately in this report.
The Board is responsible to the shareholders for the Group’s overall strategy and direction and it usually meets on a monthly basis
throughout the year. A formal schedule sets out those matters specifically reserved to the Board and its Committees.Those matters
include decisions on Group strategy and direction, acquisitions and disposals, capital structure, material contracts, corporate governance
and Group policies.
The number of Board and Committee meetings attended by each of the directors during the year was as follows:
Full Audit Remuneration Nomination
Name Board(11) Committee(3) Committee(4) Committee(1)
David T urner 11 – – 1
Christopher Cole 11 – – –
Malcolm Paul 11 – – –
Thomas Erséus 10 – – –
Christopher Stephens 11 3 4 1
Caroline Brown 10 3 4 1
The Board has a standing agenda, including receiving and considering reports from the Chief Executive and the Group Finance Director
on the Group’s operational performance, finances, ongoing strategy and risk profile, all of which are considered at the monthly
meetings.Where appropriate, matters are delegated to the Nomination, Audit and Remuneration Committees, and reports on their
activities are included on pages 38, 40 and 41 respectively.
The roles of the Chairman and Chief Executive have been established in writing to ensure the clear division of responsibilities, and this
has been agreed by the Board.The Chairman has held regular meetings with the non-executive directors without the executive
directors present.
The Chairman, who is non-executive, is responsible for leadership of the Board; setting its agenda and taking full account of the issues
and concerns of all board members; ensuring effective communication with shareholders; taking the lead on director induction and
development; encouraging active engagement by all directors, and ensuring that the performance of individuals and of the board as a
whole, and its committees, is evaluated at least once a year.
The Chairman ensures that the Board is supplied with accurate, timely and clear information. Directors are encouraged to update their
knowledge and familiarity with the Company through meetings with senior management. As part of the induction process, an induction
pack is provided to non-executive directors. All directors have access to the company secretary who is responsible for ensuring good
information flows within the Board and its committees and between senior management and non-executive directors.The company
secretary is also responsible for advising the Board, through the Chairman, on all corporate governance matters. Directors are
encouraged to seek independent or specialist advice or training at the Company’s expense where this will add to their understanding
of the Group in the furtherance of their duties. 38 WSP Annual Report 2004
Corporate Governance Report – continued
As required by the Combined Code, the Board has introduced a process to formally evaluate its own performance and that of its
Committees and individual directors.The performance of the Board and its Committees was the subject of Board discussion, led by the
Chairman to consider effectiveness against performance criteria and potential risks to performance.
The performance evaluations of Board members has been structured in such a way as to ensure balanced and objective review of
directors’ performance by using a system of questionnaires intended to stimulate discussion of factors including individual performance
and commitment.The individual performances of the Chairman, the Chief Executive, the other executive directors and the
independent non-executive directors have all been reviewed during the year taking account of the views of the other Board directors.
In particular, the senior non-executive director led the non-executive directors’ review of the Chairman. Following these performance
reviews, the Chairman is responsible for ensuring that the appropriate actions are taken.The evaluations provide a feedback mechanism
and have helped in identifying Board performance objectives as well as individual actions such as training.
In accordance with the Company’s Articles of Association, one third of directors are required to retire by rotation and, if appropriate,
submit themselves for re-election, which in practice means that each director shall retire by rotation at least every three years. At the
forthcoming AGM, a resolution will be placed to adopt new Articles of Association which amongst other matters, if adopted, will
require directors to retire by rotation on the third anniversary of their appointment or re-appointment to the Board.
Directors appointed during the year are subject to election by shareholders at the first opportunity after their appointment.The names
of those directors submitted for re-election are detailed in the Directors’ Report on page 34. Biographies of each of the directors are
set out on pages 30 and 31.
Nomination Committee Report
The Nomination Committee has written Terms of Reference to lead the process for board appointments and make recommendations
to the board thereon.
The Nomination Committee, which met once during the year, comprises the Chairman of the Board, David Turner (Committee
Chairman), and two independent non-executive directors, Christopher Stephens and Caroline Brown.Where appropriate, the
Nomination Committee receives proposals from, and consults with, the Chief Executive regarding their proposals.
Although, during the year, no new Board appointments have been made, the Nomination Committee has considered the balance of
skills, knowledge and experience on the Board. In the light of non-executive director performance evaluations, it has reviewed the time
commitment required from non-executive directors to fulfil their duties, and has considered the succession of executive and non-
executive directors.The Board has developed succession plans which evaluate the risks associated with changes to directors and
identify contingency provisions intended to mitigate the potential down-side impact of such an event.
While the Board has not made any new appointments in the current year, the Nomination Committee’s terms of reference require it
to develop proposals to the Board, that include a description of any new appointment, the likely capabilities of a suitable candidate, and
the likely time commitment.Where appropriate, it is intended that open advertising or an external search consultancy will be used to
advertise Board positions.
Remuneration Committee Report
A report on executive directors’ remuneration and the activities of the remuneration committee is set out on pages 41 to 44.
Audit Committee Report
The Report of the Audit Committee on page 40 sets out in more detail its delegated role in advising and making recommendations to
the Board on matters including financial reporting, internal controls, risk management, and the appointment of auditors.
Internal Control
The directors have ultimate responsibility for the system of internal controls and for reviewing its effectiveness.The system of internal
control is designed to manage rather than eliminate the risk of failure to achieve business objectives. In pursuing these objectives,
internal control can only provide reasonable and not absolute assurance against material misstatement or loss.
The operational and strategic direction of the Group is monitored through the following committees which provide direction and
control throughout the Group:
●
The Performance Committee has written terms of reference and meets once a month to review and consider the operational and
financial performance of the Group. Each meeting has a formal agenda that includes risk management issues.The Committee consists
of the executive directors and the chairmen of the Executive Committees.The discussions of the Performance Committee are
reported to the Board.
●
Three Executive Committees meet monthly and are responsible for the day-to-day management of the Group.These Committees
embrace the regional businesses in the UK and Sweden, while the Global Environmental Executive Committee is formed from the WSP Annual Report 2004  39
environmental businesses in all regions.The Committees comprise the Managing Directors of each of the principal operating
subsidiaries.The Chief Executive and Group Finance Director regularly visit and attend Board meetings in the USA and other
international subsidiaries.
●
The Strategy Committee, met twice during the year, and has written terms of reference to develop the strategic direction of the
Group and consider strategic proposals.The Committee consists of the executive directors, the chairmen of the Executive
Committees together with such other senior executives as are deemed appropriate.The Committee reports to the Board.
The members of the Executive Committees and subsidiary directors are responsible for the management and operation of their
businesses and clearly defined levels of authority have been established between the Group’s executive directors, the Executive
Committees and subsidiary Boards. Subsidiaries subscribe to the Group’s Vision and Values but have autonomy to develop appropriate
and effective ways of working, while operating a control environment established in accordance with Group policies and systems of
internal control.
Management are responsible for reviewing risks, and for identifying, evaluating and managing the significant risks applicable to their areas
of business. Risks are reviewed and assessed on a regular basis by the Performance Committee, the Group Financial Risk Manager, the
Audit Committee and the Board. On an annual basis, individual businesses complete internal control questionnaires from which an
assessment of compliance with the Group’s systems of internal control is prepared.The effectiveness of controls is considered in
conjunction with the range of risks and their significance to the operating circumstances of individual businesses.
Working throughout the Group, the role of the Group Financial Risk Manager is to identify, monitor and report on the significant
financial and operating risks faced by the Group to provide assurance that WSP meets the highest standards of corporate governance
expected by its stakeholders. Reporting to the Audit Committee, priority is given to key risks.
The Audit Committee assists the Board in its review of the effectiveness of internal controls and is responsible for setting the strategy
for the internal control review. In doing so, it takes account of the organisational framework and reporting mechanisms embedded
within the Group, and the work of the Group Financial Risk Manager.
During the year the Board has reviewed the effectiveness of its internal controls. In its deliberations the Board has taken account of the
advice of the audit committee, reports received from the external auditors, and any other related factors which have come to its
attention.
The Board is satisfied that there is an ongoing process for identifying, evaluating and managing the significant risks faced by the
company, that it has been in place for the year under review and up to the date of approval of the annual report and accounts, and
that it accords with the Turnbull Guidance on internal control.The process does not extend to associate companies or joint ventures
where the Group does not have a controlling interest. In joint ventures, systems of internal control are agreed in conjunction with joint
venture partners. Details of associate companies and joint ventures are provided in note 13 to the accounts.
Relations with Shareholders
In the interests of developing mutual understanding of objectives, the executive directors have met regularly with institutional investors
to discuss the performance of the Group and its future strategy. Invitations have been extended to institutional investors to meet the
Chairman and other non executive directors.
The Board is kept informed of shareholder views and correspondence as well as the views of institutional investor advisory bodies
such as PIRC and the ABI.
Corporate and financial presentations are regularly made to Fund Managers, Brokers and the Media, particularly at the announcement
of interim and final results. Copies of the presentations are published on the Group web site. All shareholders are welcome to attend
the Annual General Meeting in May where they have the opportunity to put questions to the directors, including the chairmen of
Board Committees.
At the Annual General Meeting separate resolutions are proposed for each substantially different issue to enable each to receive
proper consideration. Proxy votes are disclosed after each resolution has been dealt with by a poll. Notice of the Annual General
Meeting and related papers are sent to shareholders at least 20 working days in advance. Further information on the activities of the
Group and other shareholder information are available via the WSP Group web site, www.wspgroup.com.
Statement of Compliance with the Combined Code
Throughout the year under review, the Group has complied with all the provisions of the 2003 FRC Combined Code on Corporate
Governance as laid down in the Listing Rules of the Financial Services Authority. 40 WSP Annual Report 2004
Report of the Audit Committee
The Audit Committee advises and makes recommendations to the Board on matters including financial reporting, internal controls, risk
management, and the appointment of auditors.The role of the Committee is set out in its written terms of reference.
The Committee, which met three times during the year, comprises two independent non-executive directors, Caroline Brown as
chairman and Christopher Stephens. Caroline Brown is a finance professional, and her understanding of corporate financial matters
brings recent and relevant financial experience to the Committee.Where appropriate, the Committee consulted with the Chairman of
the Board and the Chief Executive regarding their proposals.The Chairman, Executive Directors and Group Financial Risk Manager
were invited to the meetings for parts of the agenda.The external auditors also attended two of the meetings, and a portion of their
time was spent in private with the Audit Committee.
Responsibilities include monitoring the integrity of the financial statements of the company and any formal announcements relating to
the Group’s financial performance.The Committee has reviewed the Group’s financial statements and formal announcements relating
to the Group’s financial performance before their presentation to the Board. In so doing, it considered accounting policies, areas of
judgement or estimate, and reporting requirements, as well as matters brought to their attention by the external auditors. During the
year, the Committee has monitored and been kept informed of progress in implementing International Financial Reporting Standards.
The Audit Committee is responsible for assessing the requirement for a separate internal audit function.The Committee remains
satisfied that the culture of embedded controls and continual peer review, together with the work of the Group Financial Risk Manager,
is effective in monitoring the established systems. An internal audit function would have limited additional benefit at this time, although
it remains under review.
The Committee is responsible for reviewing the Group’s systems of internal control and risk management, and determines the scope
of work undertaken by the Group Financial Risk Manager. It receives reports from the Group Financial Risk Manager, with whom the
results are discussed on a regular basis.The Committee concluded its annual review of the effectiveness of the Group’s systems of risk
management and internal control at its December meeting. As required by the Combined Code, the Committee has reviewed
arrangements by which staff may, in confidence, raise concerns about possible improprieties.The Committee considers that these
arrangements are appropriate given the nature of the risks involved.
The Committee is responsible for making recommendations to the Board in relation to the appointment of external auditors. It is
responsible for monitoring the independence and objectivity of the external auditors, and for agreeing the level of remuneration and
the extent of non-audit services.
During the year, PricewaterhouseCoopers LLP (‘PwC’) reported to the Committee on its audit strategy and the scope of audit work.
The Committee has reviewed the performance of PwC and the level of non-audit fees paid to PwC during the year.These are set out
in note 6 on page 57.The provision of non-audit services, except tax compliance and routine taxation advice, must be referred to the
Committee where it is likely to exceed a pre-determined threshold of £10,000. Any work that falls below that threshold must be pre-
approved by the Group Finance Director. No material consultancy work has been carried out by PwC during the year. By monitoring
and restricting both the nature and quantum of non-audit services provided by the external auditors, the Committee seeks to
safeguard auditor objectivity and independence.
Caroline Brown
Chairman of the Audit Committee
4 March 2005
Corporate Governance – Report of the Audit Committee WSP Annual Report 2004  41
Remuneration Report
The Remuneration Committee has written Terms of Reference to determine, on behalf of the Board, the Group’s policy on executive
remuneration and to consider and approve remuneration packages for executive directors. In addition, the Committee monitors and
makes recommendations on the level of senior management remuneration across the Group.The Board’s report is set out below.
The Committee, which met four times during the year, comprises two independent non-executive directors, Christopher Stephens as
chairman and Caroline Brown.Where appropriate, the Committee consulted with the Chairman of the Board and the Chief Executive
regarding their proposals.
Remuneration Policy
The policy of the Board is to attract, retain and motivate the best executive directors by rewarding them with competitive salary and
benefit packages linked to achieving the Group’s strategic goals. Presently, the three executive directors have very significant beneficial
holdings of WSP shares and as such their interests are closely aligned with other shareholders.
During the year the Committee considered a variety of independent information including the comparison of the executives’
remuneration with companies of a similar size and diversification. In addition, as WSP is an international business the Committee takes
into account employment practices both in the UK and overseas, as well as having due regard to the remuneration packages
throughout the Group.
The performance related elements of executive remuneration comprise annual bonuses and awards under the WSP Performance
Share Plan.These incentives are designed to be relevant to the overall objectives of the Group and to enhance the business.The
performance targets set by the Committee are reviewed annually and are intended to be stretching and to reward superior
performance in the light of the prevailing economic climate.
The members of the Committee have no personal interest in the outcome of their decisions and give due regard to the interests of
shareholders and to the continuing financial and commercial health of the business.
The remuneration packages of the executive directors comprise:
●
Basic salaries that are reviewed annually having regard to individual performance, responsibility and skills, and comparable evidence of
other companies in the sector, together with specific employee benefits.
●
The executive directors are members of defined contribution pension schemes and annual contributions are calculated by reference
to basic salaries with neither annual bonuses nor awards under the share incentive schemes taken into account in calculating the
amounts due.
●
Performance related annual bonuses, up to a maximum of 100% of the executive directors’ salary, are calculated by reference to the
Group meeting preset annual profit targets. In 2004, these targets required profit before exceptional items, the amortisation of
goodwill and tax to grow by 10%, at which point an annual bonus of 40% would be payable and this would increase pro rata up to
a maximum of 100% if 20% growth was achieved. In 2004 the profit growth was such that the performance related annual bonus
amounted to 82.9% of the executive directors’ salary.
●
Share awards under the terms of the WSP Performance Share Plan, up to a maximum of 75% of the executive directors’ basic salary,
are linked to the long-term performance of the Company and further align the executives’ interests with those of the shareholders.
The extent to which an award will vest, and thus becomes exercisable, is measured by reference to the growth in WSP’s earnings
per share over the performance period.
In respect of awards granted before 2003, participants only received 100% of any award if the earnings per share over a three-year
period from the date of the award had increased by at least 72.8% plus the equivalent increase in the Retail Price Index, which
represents 20% annual compounded growth. No award would vest unless the Company’s earnings per share over the same period
had increased by 15.8% plus the equivalent increase in the Retail Price Index, which represents 5% annual compound growth, and at
this level the participant would receive 25% of any award.
In the opinion of the Committee these performance criteria were unsustainable in the medium term and therefore from 2003 were
changed so that participants only receive 100% of any award if the earnings per share over a three-year period from the date of the
award has increased by at least 8% per annum plus the equivalent increase in the Retail Price Index. No award will vest unless the
Company’s fully diluted earnings per share over the same period has increased by 4% per annum plus the equivalent increase in the
Retail Price Index, and at this level the participant would receive 25% of any award. Principal Institutional shareholders were notified of
the change in 2003.
●
The executive directors also qualify for the WSP Deferred Bonus Share Plan that allows them and other senior executives to invest
up to 50% of their after tax annual bonus in shares of the Company. If these shares are held for more than three years the
Company will grant an award of the right to acquire a matching number of shares for a nominal price.This plan is designed to retain
senior staff for at least a three-year period from the date the individual invests in the shares of the Company. For awards made after
2003, performance criteria have been set that require fully diluted earnings per share to have grown by at least 5% per annum plus
the Retail Price Index by the vesting date. 42 WSP Annual Report 2004
Remuneration Report – continued
Where awards under the above schemes depend upon earnings per share growth, the Committee are aware of the necessity to
ensure that the impact of the introduction of International Financial Reporting Standards are taken into account to ensure that earnings
per share are calculated on a consistent basis.
Directors’ Service Contracts
The Board’s policy is to offer service agreements to executive directors with notice periods of not more than 12 months.
The Directors’ service contracts may be summarised as follows:
Director Contract Date Unexpired Notice Period Contractual Termination
Term Payments
David T urner 01.06.1997 3 months 3 months 3 months’ in lieu of notice
Christopher Cole 01.01.2004 12 months 12 months One year’s remuneration
Malcolm Paul 01.01.2004 12 months 12 months One year’s remuneration
Thomas Erséus 29.05.2001 12 months 12 months One year’s remuneration
Caroline Brown 01.07.2003 3 months 3 months 3 months’ in lieu of notice
Christopher Stephens 10.01.2003 3 months 3 months 3 months’ in lieu of notice
With effect from 1 January 2004, the Committee agreed new service agreements with Christopher Cole and Malcolm Paul which,
inter alia, reduced the notice period from 24 to 12 months.
The terms of the new service contracts allow for liquidated damages that extend beyond basic salaries to include bonuses, which the
Committee consider reflects the true financial entitlement of the individuals concerned.
The non-executive directors of the Company are appointed for a three-year term, which may be terminated on three months’ written
notice, with their remuneration determined by the Board. Renewal of their appointment is not automatic and they stand for re-election
in accordance with the Company’s Articles of Association.
The targeted composition of each director’s remuneration for the forthcoming year is as follows:
Director Position Non Performance Performance
Related Related
David T urner Non-executive Chairman 100% –
Christopher Cole Chief Executive 36% 64%
Malcolm Paul Group Finance Director 36% 64%
Thomas Erséus Executive Director 36% 64%
Caroline Brown Non-executive Director 100% –
Christopher Stephens Non-executive Director 100% –
Directors’ Remuneration (Audited information)
The following table shows an analysis of the remuneration of each director:
Salary Performance Bonus
Director and in in WSP Employee 2004 2003 2004 2003
fees cash shares Benefits T otal T otal Pension Pension
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
David T urner 45––– 45 35––
Christopher Cole 270 134 90 21 515 284 94 44
Malcolm Paul 250 124 83 20 477 278 87 43
Thomas Erséus 220 182 – 5 407 228 67 51
Christopher Stephens 25––– 25 25––
Caroline Brown 25––– 25 12––
Peter Welch ––––– 34––
Jan Åkesson ––––– 19––
835 440 173 46 1,494 915 248 138
The employee benefits include a car allowance, together with medical and health insurance cover.
Christopher Cole and Malcolm Paul have agreed with the Committee to invest 40% of their after tax performance bonus in
WSP shares. WSP Annual Report 2004  43
Where executive directors have received approval to serve in a non–executive capacity with other companies, the Board has agreed
that they may retain any remuneration received. In 2004 the remuneration received in respect of such appointments by Christopher
Cole and Thomas Erséus amounted to £30,000 and £15,000 respectively.
Long Term Incentive Share Plans (Audited information)
a)  The WSP Performance Share Plan
At 31 December 2004, the Committee had made the following awards under the WSP Performance Share Plan, which are dependent
upon the Company’s future earnings per share growth.The LTIP awards made to directors on 1 April 2001 have lapsed as a result of
the failure to meet the required growth in earnings per share since that date.
Market
Earliest price at Number of Number Number Number of 2004 2003
Award Vesting Award shares at Granted of shares of shares shares at Value of Value of
Director Date Date Date 01.01.2004 in year Lapsing Vesting 31.12.2004 entitlement entitlement
No. No. No. No. No. £’000 £’000
Christopher Cole
01.04.2001 01.04.2004 425.0p 42,552 – (42,552) – – – 84
01.04.2002 01.04.2005 320.0p 51,563 – – – 51,563 134 102
01.04.2003 01.04.2006 75.0p 220,000 – – – 220,000 572 435
01.04.2004 01.04.2007 200.0p – 65,000 – – 65,000 169 –
314,115 65,000 (42,552) – 336,563 875 621
Malcolm Paul
01.04.2001 01.04.2004 425.0p 41,586 – (41,586) – – – 82
01.04.2002 01.04.2005 320.0p 50,391 – – – 50,391 131 100
01.04.2003 01.04.2006 75.0p 215,000 – – – 215,000 559 425
01.04.2004 01.04.2007 200.0p – 60,000 – – 60,000 156 –
306,977 60,000 (41,586) – 325,391 846 607
Thomas Erséus
01.04.2002 01.04.2005 320.0p 44,063 – – – 44,063 115 87
01.04.2003 01.04.2006 75.0p 210,000 – – – 210,000 546 415
01.04.2004 01.04.2007 200.0p – 55,000 – – 55,000 143 –
254,063 55,000 – – 309,063 804 502
b)  The WSP Deferred Bonus Share Plan
At 31 December 2004, outstanding awards to directors under the Deferred Bonus Share Plan were as follows:
Market
Earliest price at Number Number 2004 2003
Award Vesting Award of shares Exercised Granted of shares Value of Value of
Director Date Date Date 01.01.2004 in year in year 31.12.2004 entitlement entitlement
No. No. No. No. £’000 £’000
Christopher Cole 01.04.2003 01.04.2006 75.0p 83,333 – – 83,333 217 165
Malcolm Paul 01.04.2003 01.04.2006 75.0p 83,333 – – 83,333 217 165
Thomas Erséus 01.04.2003 01.04.2006 75.0p 83,333 – – 83,333 217 165
The value of entitlements under the WSP Performance Share Plan and the WSP Deferred Bonus Share Plan are calculated by
reference to the middle market share price at 31 December 2004 which was 260p (2003: 197.5p) and the range in the year was
181.5p to 260p.
In accordance with the Group’s accounting policy for Employee Share Schemes, long term incentive compensation arising out of the
above plans is disclosed in directors’ remuneration when they crystallise, which will normally be after the third anniversary of the
award, and appropriate provisions are built up over the vesting period. 44 WSP Annual Report 2004
Remuneration Report – continued
Directors’ Interests
The beneficial and contingent interests of the directors in the 5p ordinary shares of the Company were as follows:
Beneficial Performance Deferred Bonus Total
Director Shares Share plan Share plan Shares
No. No. No. No.
At 31 December 2004
David T urner 10,910 – – 10,910
Christopher Cole 908,777 336,563 83,333 1,328,673
Malcolm Paul 822,976 325,391 83,333 1,231,700
Thomas Erséus 352,200 309,063 83,333 744,596
Christopher Stephens 5,000 – – 5,000
Caroline Brown ––––
At 1 January 2004
David T urner 10,217 – – 10,217
Christopher Cole 908,777 314,115 83,333 1,306,225
Malcolm Paul 822,976 306,977 83,333 1,213,286
Thomas Erséus 252,200 254,063 83,333 589,596
Christopher Stephens 5,000 – – 5,000
Caroline Brown ––––
There have been no changes in directors’ share interests since 31 December 2004.
Performance Graph
Set out below is a Performance Graph that compares the total shareholder return (TSR) of WSP shares with the FTSE Small Cap
index.The FTSE Small Cap index has been selected because it includes UK quoted companies of a similar size to WSP .
TSR is defined as the return shareholders would receive if they held a notional number of shares and received dividends on those
shares over a period of time.The graph demonstrates that WSP’s position continues to strengthen by comparison with the Small Cap
index.
Christopher Stephens
Chairman of the Remuneration Committee
4 March 2005
WSP Group plc T otal Shareholder Return compared to the FTSE Small Cap
index in the 5 years to December 2004
200
100
0
2000 2001 2002 2003 2004 2005
WSP Group plc FTSE Small Cap
PERFORMANCE INDEX WSP Annual Report 2004  45
Auditors’ Report
Independent auditors’ report to the members of WSP Group plc
We have audited the financial statements which comprise the consolidated profit and loss account, the balance sheets, the consolidated
cash flow statement, the statement of Group total recognised gains and losses, the reconciliation of movements in Group equity
shareholders’ funds and the related notes which have been prepared under the historical cost convention and the accounting policies
set out in the statement of accounting policies.We have also audited the disclosures required by Part 3 of Schedule 7A to the
Companies Act 1985 contained in the directors’ remuneration report (‘the auditable part’).
Respective responsibilities of directors and auditors
The directors’ responsibilities for preparing the annual report and the financial statements in accordance with applicable United
Kingdom law and accounting standards are set out in the statement of directors’ responsibilities.The directors are also responsible for
preparing the directors’ remuneration report.
Our responsibility is to audit the financial statements and the auditable part of the directors’ remuneration report in accordance with
relevant legal and regulatory requirements and United Kingdom Auditing Standards issued by the Auditing Practices Board.This report,
including the opinion, has been prepared for and only for the Company’s members as a body in accordance with Section 235 of the
Companies Act 1985 and for no other purpose.We do not, in giving this opinion, accept or assume responsibility for any other
purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our
prior consent in writing.
We report to you our opinion as to whether the financial statements give a true and fair view and whether the financial statements
and the auditable part of the directors’ remuneration report have been properly prepared in accordance with the Companies Act
1985.We also report to you if, in our opinion, the directors’ report is not consistent with the financial statements, if the Company has
not kept proper accounting records, if we have not received all the information and explanations we require for our audit, or if
information specified by law regarding directors’ remuneration and transactions is not disclosed.
We read the other information contained in the annual report and consider the implications for our report if we become aware of
any apparent misstatements or material inconsistencies with the financial statements.The other information comprises only the
directors’ report, the unaudited part of the directors’ remuneration report, the chairman’s statement, the Chief Executive’s report, the
Group Finance Director’s report, the corporate governance report and other information for shareholders.
We review whether the corporate governance statement reflects the Company’s compliance with the nine provisions of the 2003 FRC
Combined Code specified for our review by the Listing Rules of the Financial Services Authority, and we report if it does not.We are
not required to consider whether the board’s statements on internal control cover all risks and controls, or form an opinion on the
effectiveness of the Group’s corporate governance procedures or its risk and control procedures.
Basis of audit opinion
We conducted our audit in accordance with auditing standards issued by the Auditing Practices Board. An audit includes examination,
on a test basis, of evidence relevant to the amounts and disclosures in the financial statements and the auditable part of the directors’
remuneration report. It also includes an assessment of the significant estimates and judgements made by the directors in the
preparation of the financial statements, and of whether the accounting policies are appropriate to the Company’s circumstances,
consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to
provide us with sufficient evidence to give reasonable assurance that the financial statements and the auditable part of the directors’
remuneration report are free from material misstatement, whether caused by fraud or other irregularity or error. In forming our
opinion we also evaluated the overall adequacy of the presentation of information in the financial statements.
Opinion
In our opinion:
●
the financial statements give a true and fair view of the state of affairs of the Company and the Group at 31 December 2004 and
the profit and cash flows of the Group for the year then ended;
●
the financial statements have been properly prepared in accordance with the Companies Act 1985; and
●
those parts of the directors’ remuneration report required by Part 3 of Schedule 7A to the Companies Act 1985 have been
properly prepared in accordance with the Companies Act 1985.
PricewaterhouseCoopers LLP
Chartered Accountants and Registered Auditors
1 Embankment Place
London WC2N 6RH
4 March 2005 46 WSP Annual Report 2004
Before 2004 Before 2003
Goodwill Goodwill T otal Goodwill Goodwill T otal
Notes £’000 £’000 £’000 £’000 £’000 £’000
Group and share of joint ventures and 
associated undertakings turnover
– continuing operations 1 321,123 – 321,123 298,868 – 298,868 
– acquisitions in the year 1 7,095 – 7,095 – – – 
1 328,218 – 328,218298,868 – 298,868 
Less: share of turnover of joint ventures and
associated undertakings – continuing operations 4 (19,972) – (19,972) (15,315) – (15,315)
T urnover 308,246 – 308,246283,553 – 283,553 
Group and share of joint ventures and associated
undertakings operating profit, before exceptional 
items and amortisation of goodwill 17,813 – 17,81316,004 – 16,004 
Exceptional item 3 – – – (2,250) – (2,250)
Amortisation of goodwill – (5,446) (5,446) – (5,269) (5,269)
Total operating profit, including joint ventures
and associated undertakings 17,813 (5,446) 12,367 13,754 (5,269) 8,485 
Group share of operating profit
– continuing operations 16,605 (5,332) 11,273 13,532 (5,269) 8,263 
– acquisitions in the year 342 (114) 228 – – – 
Group operating profit 16,947 (5,446) 11,501 13,532 (5,269) 8,263 
Share of operating profit of joint ventures and
associated undertakings – continuing operations 866 – 866 222 – 222 
Total operating profit 2 17,813 (5,446) 12,367 13,754 (5,269) 8,485 
Profit on sale of subsidiary undertaking 20 – – – 409 – 409 
Net finance costs 5 (2,801) – (2,801) (3,313) – (3,313)
Profit on ordinary activities before taxation 15,012 (5,446) 9,566 10,850 (5,269) 5,581 
Taxation 8 (4,777) – (4,777) (3,429) – (3,429)
Profit on ordinary activities after taxation 10,235 (5,446) 4,789 7,421 (5,269) 2,152 
Minority interests (equity) (209) – (209) (90) – (90)
Profit for the financial year 10,026 (5,446) 4,580 7,331 (5,269) 2,062 
Dividends 9 (3,204) – (3,204) (3,010) – (3,010)
Retained profit/(loss) for the financial year 19 6,822 (5,446) 1,376 4,321 (5,269) (948)
Basic earnings per share 10 16.6p (9.0p) 7.6p 12.7p (9.1p) 3.6p
Diluted earnings per share 10 16.0p (8.7p) 7.3p 12.4p (8.9p) 3.5p
Dividends per ordinary share 9 5.3p 5.0p
The above results all relate to continuing operations.
Consolidated Profit and Loss Account
For the year ended 31 December 2004 WSP Annual Report 2004  47
The Group The Company
2004 2003 2004 2003
Notes £’000 £’000 £’000 £’000
Restated Restated
Fixed assets
Intangible assets 11 89,088 92,556 1,271 1,357 
Tangible assets 12 16,663 16,845 105 153 
Investments in associated undertakings 13 4,802 3,196 – – 
Investments in joint ventures 13
Share of gross assets 2,848 1,836 – –
Share of gross liabilities (2,733) (1,808) – – 
115 28 – – 
Investments in subsidiary undertakings 13 – – 38,751 25,025 
Other investments 13 1,090 1,164 – – 
111,758 113,789 40,127 26,535 
Current assets
Debtors 14 95,907 88,661 97,793 137,112 
Cash at bank 10,749 16,444 962 131 
106,656 105,105 98,755 137,243 
Creditors due within one year 15 (74,263) (127,374) (22,733) (73,321)
Net current assets/(liabilities) 32,393 (22,269) 76,022 63,922 
Total assets less current liabilities 144,151 91,520 116,149 90,457 
Creditors due after more than one year 15 (50,854) (1,027) (23,800) – 
Provisions for liabilities and other charges
Deferred taxation 16 (5,578) (5,174) (47) (47)
Other provisions 17 (1,599) (870) (102) (194)
Net assets 86,120 84,449 92,200 90,216 
Capital and reserves
Called up share capital 18 3,023 3,022 3,023 3,022 
Share premium account 19 76,537 76,510 76,537 76,510 
Shares to be issued 18 207 253 207 253 
Other reserves 19 – – 8,210 8,210 
Profit and loss account 19 6,033 4,552 4,223 2,221 
Equity shareholders’ funds 85,800 84,337 92,200 90,216 
Minority interests – equity 320 112 – – 
86,120 84,449 92,200 90,216 
Approved by the Board of Directors on 4 March 2005 and signed on their behalf by:
CHRISTOPHER COLE, Chief Executive
MALCOLM PAUL, Group Finance Director
Balance Sheets
As at 31 December 2004 Consolidated Cash Flow Statement
For the year ended 31 December 2004
48 WSP Annual Report 2004
2004 2003
Notes £’000 £’000
Net cash inflow from operating activities 21 24,022 17,301 
Dividend received from associated undertaking 169 532 
Returns on investments and servicing of finance
Bank interest paid (2,992) (3,685)
Bank interest received 261 448 
Interest paid on finance leases (70) (76)
Closure of Swedish Kronor currency swap (6,827) – 
(9,628) (3,313)
Taxation paid
UK taxation (2,157) (1,325)
Overseas taxation (2,522) (1,089)
(4,679) (2,414)
Capital expenditure and financial investment
Purchase of tangible fixed assets (5,346) (4,732)
Sale of tangible fixed assets 229 542 
Purchase of investments (148) (149)
(5,265) (4,339)
Acquisitions and disposals
Sale of subsidiary undertaking – 1,252 
Net cash of subsidiary acquired/(disposed) 802 (259)
Purchase of subsidiary undertakings (2,474) (369)
Deferred consideration paid (467) (4,871)
(2,139) (4,247)
Equity dividends paid (3,083) (2,794)
Net cash (outflow)/inflow before financing (603) 726 
Financing 22 (7,030) 3,718 
(Decrease)/increase in cash in the year 23 (7,633) 4,444  Statement of Group Total Recognised Gains and Losses
For the year ended 31 December 2004
WSP Annual Report 2004  49
2004 2003
Notes £’000 £’000
Profit for the financial year 4,580 2,062 
Translation differences on foreign exchange (514) (1,203)
Total gains and losses recognised in the year 4,066 859 
Prior year adjustment 30 162
Total gains and losses recognised since last Annual Report 4,228
There is no material difference between the historical cost and the reported profit.
Reconciliation of Movements in Group Equity Shareholders’ Funds
For the year ended 31 December 2004
The Group The Company
2004 2003 2004 2003
£’000 £’000 £’000 £’000
Restated Restated
Profit for the financial year 4,580 2,062 3,837 3,582 
Dividends (3,204) (3,010) (3,204) (3,010)
Retained profit/(loss) for the financial year 1,376 (948) 633 572 
New ordinary shares issued 28 5,617 28 5,617 
Movement in shares to be issued (46) (5,516) (46) (5,516)
Performance share plan 619 235 619 235 
Translation differences on foreign exchange (514) (1,203) 750 (1,567)
Net addition to/(deduction from) equity shareholders’ funds 1,463 (1,815) 1,984 (659)
Equity shareholders’ funds at 1 January as restated (originally £86,265,000 
for the Group and £90,988,000 for the Company before deducting 
prior year adjustment of £113,000) 84,337 86,152 90,216 90,875 
Equity shareholders’ funds at 31 December 85,800 84,337 92,200 90,216  Accounting Policies 
For the year ended 31 December 2004
50 WSP Annual Report 2004
The financial statements have been prepared in accordance with Accounting Standards applicable in the United Kingdom.The principal
accounting policies have been applied consistently except in respect of UITF Abstract 38 ‘Accounting for ESOP Trusts’ as noted below.
Accounting policies
In accordance with FRS18, the directors have reviewed the appropriateness of the Group’s accounting policies, and with one exception
no changes in accounting policy are required.
UITF Abstract 38,‘Accounting for ESOP Trusts’, has been adopted in the current year. UITF 38 requires that investments in own shares
previously disclosed in Fixed Assets Other Investments are presented as a deduction in Shareholders’ Funds.
The 2003 comparatives have been restated to reflect the adoption of UITF Abstract 38 and the reversal of prior year amortisation
charges. Note 30 sets out the effect of the change on the 2003 results.
Basis of accounting 
The financial statements have been prepared in accordance with the Companies Act 1985 using the historical cost basis of accounting
and on a going concern basis. In accordance with Section 230 of the Companies Act 1985, a separate profit and loss account for the
Company is not presented.
Basis of consolidation 
The Group financial statements consolidate the financial statements of the Company and its subsidiary undertakings all prepared to 
31 December each year.The results and net assets of subsidiary undertakings acquired are included in the Group profit and loss
account and balance sheet using the acquisition method of accounting from the effective date of acquisition.
The results, and net assets of subsidiary undertakings disposed of, are included in the Group profit and loss account and balance sheet
using the acquisition method of accounting to the effective date of disposal. Income and expenditure relating to transactions between
Group undertakings are eliminated on consolidation.
The consolidated profit and loss account includes the results of the Group’s equity interests and results of the Group’s joint ventures
and associated undertakings in accordance with FRS 9 ‘Associates and Joint Ventures’.
Investments
Investments in subsidiaries, associated undertakings and joint ventures are stated in the Company’s balance sheet at cost less any
permanent impairment in value. Certain other investments are included at cost less provision for any diminution in value.
Goodwill 
Goodwill represents the difference between the fair value of cost of acquisitions and the fair value of net assets acquired.The cost of
acquisitions comprises the fair value of the initial consideration, deferred consideration paid or accrued and professional and other
costs directly associated with the acquisition.
Purchased goodwill arising on consolidation in respect of acquisitions before 1 January 1998, when FRS 10 ‘Goodwill and intangible
assets’ was adopted, was written off to reserves in the year of acquisition.When a subsequent disposal occurs any related goodwill
previously written off to reserves is written back through the profit and loss account as part of the profit or loss on disposal.
Purchased goodwill arising on consolidation in respect of acquisitions since 1 January 1998 is capitalised. Positive goodwill is amortised
to nil by equal annual instalments over its estimated useful life on a case-by-case basis up to 20 years.
Impairment of purchased goodwill is reviewed in accordance with FRS 10 by reference to expected future profits and cash flows,
discounted at an appropriate rate. WSP Annual Report 2004  51
T urnover
Group turnover comprises the value of work performed during the year on contracts by reference to total sales value and stage of
completion of these contracts.
Long term contracts
Amounts recoverable on contracts are stated at cost plus attributable profits less foreseeable losses and progress payments received
and receivable and are disclosed under debtors. Cost comprises direct labour and attributable overheads. Attributable profit is that
proportion of the total profit currently estimated to arise over the duration of a contract, which has been earned based on the work
carried out at the balance sheet date.
Foreseeable losses are all losses currently expected to arise on contracts in progress, irrespective of their stage of completion at the
balance sheet date. Progress payments receivable in excess of the value of work executed on individual contracts are included in
creditors under the heading payments received on account.
In the case of short term projects, profit is not recognised until the end of the contract except where a right to consideration has
been established as a result of performance. Under such circumstances revenue is based on the fair value of the right to consideration.
Depreciation
Depreciation is provided at rates calculated to write off the cost of tangible fixed assets less estimated realisable value by equal annual
instalments over their expected useful lives, subject to an impairment review.The rates applicable are as follows:
Freehold and long leasehold property 1%
Short leasehold property lease term 
Motor vehicles 25% 
Office equipment 20-33%
Fixtures and fittings 10%
Leasing 
The capital cost of equipment acquired under finance leases is capitalised. Finance costs are charged to the profit and loss account over
the period of the agreement. Obligations under finance leases are included in creditors net of finance costs allocated to future periods.
Rentals paid under operating leases are charged to the profit and loss account as incurred on a straight-line basis.
Earnings per share
In accordance with FRS 14 ‘Earnings Per Share’ the Group presents both basic and diluted earnings per share for the current and
preceding years.The basis of calculation is given in note 10 to the financial statements.
Foreign currencies 
Transactions in foreign currencies are translated at the exchange rate ruling at the date of the transaction, or where forward cover
contracts have been arranged, at the contracted rates. Monetary assets and liabilities denominated in foreign currencies, where a
contracted rate does not apply, are translated at the exchange rates ruling at the balance sheet date and any exchange differences are
taken to the profit and loss account.
The profit and loss accounts and balance sheets of overseas subsidiaries are translated into sterling at the rates of exchange ruling at
the balance sheet date. Differences arising on the translation of opening and closing net assets are shown as a movement in reserves
and in the statement of total recognised gains and losses.
The Group’s significant overseas equity investments are hedged by borrowings in the currencies in which those assets are denominated
and by the use of derivative financial instruments. Exchange differences arising on the retranslation of overseas net investments,
including goodwill, less exchange differences on the borrowings and derivative financial instruments are taken to reserves through the
statement of total recognised gains and losses. Accounting Policies – continued 
For the year ended 31 December 2004
52 WSP Annual Report 2004
Derivatives and other financial instruments
The Group uses various derivative financial instruments to manage its exposure to foreign exchange and interest rate risks.These may
include currency swaps, foreign exchange swaps, forward foreign currency contracts, currency options, interest rate swaps and interest
rate caps and collars.The Group considers its derivative financial instruments to be hedges and matches them with the relevant
hedged items.
Cash flows relating to these derivative financial transactions are netted against hedged transactions in the cash flow statement within
net cash inflow from operating activities or return on investments and servicing of finance as appropriate.
●
Currency swaps and foreign exchange swaps
Swaps are revalued at the exchange rates ruling at the balance sheet date. Realised and unrealised exchange gains and losses on
swaps that hedge investment in overseas operations are taken to reserves through the statement of total recognised gains and
losses. Realised and unrealised exchange gains and losses on other swaps are recognised in the profit and loss account.The premium
or discount on foreign exchange swaps and interest payments and receipts on currency swaps are recognised as part of the net
interest payable over the period of the contract.
●
Forward foreign exchange contracts
The Sterling equivalent of forward foreign exchange contracts used to hedge foreign currency trade debtors and creditors is
recorded at the contracted amount. Realised and unrealised exchange gains and losses on these contracts are recognised in the
profit and loss account.
●
Currency options
Currency option premia are recognised at their historic cost in the consolidated balance sheet. At maturity the hedged item is
recorded at the spot exchange rate net of option premia and any realised gains on exercise.
●
Interest rate swaps
Interest payments and receipts are accrued with net interest payable.They are not revalued to fair value or shown on the
consolidated balance sheet at the year end.
●
Interest rate caps and collars
The option premia paid are recognised on the consolidated balance sheet as other debtors.The options are not revalued to fair
value in the consolidated balance sheet.The option premia, net of any realised gains, are taken to net interest payable spread evenly
over the life of the cap and collar.
●
Upfront fees
Upfront fees on debt are amortised evenly over the term of the debt.
Pension costs
The Group makes contributions into six separate defined benefit schemes.These schemes are closed to new entrants. Payments are
made into trust funds, which are financially separate from the Group, in accordance with periodic calculations by independent
professionally qualified actuaries.The expected cost to the Group of providing defined benefit pensions is charged to the Profit and
Loss account so as to spread the cost of pensions over the remaining service lives of employees in the schemes, in such a way that the
cost is substantially a level percentage of payroll cost, with experience surpluses and deficits being amortised on a straight line basis.
Amounts payable to defined contribution schemes are charged to the profit and loss account in the year in which they arise. WSP Annual Report 2004  53
FRS 17 ‘Retirement Benefits’ 
FRS 17 ‘Retirement Benefits’ requires the assets of a defined benefit pension scheme to be measured at market value at each balance
sheet date and the liabilities to be measured using a specified actuarial valuation method and to be discounted using a corporate
bond rate.
It also requires the resulting pension scheme surplus or deficit to be recognised immediately on the Group balance sheet and any
resulting actuarial gains and losses to be recognised immediately in the Group statement of total recognised gains and losses rather
than being recognised gradually in the Group profit and loss account.
Full compliance with this standard is not currently required and the Group continues to account for pension costs under SSAP 24,
however transitional disclosure has been made in note 25 to these financial statements.
Employee share schemes 
The cost of awards to employees that take the form of shares or rights to shares (including conditional rights) are charged to the
profit and loss account over the period to which the employees’ performance relates and credited to reserves. Long term incentive
compensation is disclosed in directors’ remuneration when it crystallises.
Deferred taxation
Deferred taxation is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date, and
where these transactions or events result in an obligation to pay more tax, or a right to pay less tax in the future.Timing differences are
differences between the Group’s taxable profits and its results as stated in the financial statements.
Deferred taxation assets are only recognised when the recoverability of these can be determined with a degree of certainty. Deferred
taxation is measured at the average tax rates that are expected to apply in the periods in which the timing differences are expected to
reverse, based on tax rates and laws that have been enacted or substantially enacted at the balance sheet date. Deferred tax is
measured on a non-discounted basis.
Related party transactions
The Group has taken advantage of the exemption under FRS 8 ‘Related Party Disclosures’ not to disclose transactions between Group
companies.
Research and development
Research and development costs are written off in the year incurred. Notes to the Financial Statements
For the year ended 31 December 2004
54 WSP Annual Report 2004
1 Segmental analysis
a) T urnover Continuing
operations Acquisitions T otal T otal
2004 2004 2004 2003
£’000 £’000 £’000 £’000
By class of business:
Property 175,515 2,590 178,105 160,183
Transport & Infrastructure 90,027 3,991 94,018 91,097
Environmental 35,609 514 36,123 32,273
T urnover 301,151 7,095 308,246 283,553
Share of turnover of:
Associated undertakings – Multi-disciplinary services 10,403 – 10,403 11,275
Joint ventures – Transport & Infrastructure 9,569 – 9,569 4,040
Group and share of joint ventures and associated undertakings turnover 321,123 7,095 328,218 298,868
By location of operations:
United Kingdom 127,990 – 127,990 120,684
Mainland Europe 119,280 6,933 126,213 111,547
United States of America 27,101 – 27,101 27,780
Africa 14,593 77 14,670 11,253
Asia 10,048 85 10,133 8,694
Other 2,139 – 2,139 3,595
T urnover 301,151 7,095 308,246 283,553
Share of turnover of:
Associated undertakings – Mainland Europe 10,403 – 10,403 11,275
Joint ventures – United Kingdom 9,569 – 9,569 4,040
Group and share of joint ventures and associated undertakings turnover 321,123 7,095 328,218 298,868
There was no material difference between geographical turnover by location of operation and by location of client.
b) Profit before taxation
By class of business:
Operating profit before exceptional items and amortisation of goodwill
Property 8,884 178 9,062 7,559
Transport & Infrastructure 5,250 138 5,388 6,164
Environmental 2,471 26 2,497 2,059
16,605 342 16,947 15,782
Share of operating profit/(loss) of:
Associated undertakings – Multi-disciplinary services 771 – 771 353
Joint ventures – Transport & Infrastructure 95 – 95 (131)
17,471 342 17,813 16,004
Exceptional item – Property – (2,250)
Amortisation of goodwill (5,446) (5,269)
Total operating profit 12,367 8,485
Profit on sale of subsidiary undertaking – Property – 409
Net finance costs (2,801) (3,313)
Profit before taxation 9,566 5,581
Notes to the Financial Statements
For the year ended 31 December 2004 WSP Annual Report 2004  55
Continuing
operations Acquisitions T otal T otal
2004 2004 2004 2003
£’000 £’000 £’000 £’000
By location of operations:
Operating profit/(loss) before exceptional items and amortisation of goodwill
United Kingdom 7,813 – 7,813 8,339
Mainland Europe 5,980 334 6,314 5,165
United States of America 1,274 – 1,274 1,185
Africa 1,343 4 1,347 1,189
Asia 49 4 53 (227)
Other 146 – 146 131
16,605 342 16,947 15,782
Share of operating profit/(loss) of:
Associated undertakings – Mainland Europe 771 – 771 353
Joint ventures – United Kingdom 95 – 95 (131)
17,471 342 17,813 16,004
Exceptional item – United Kingdom – (2,250)
17,813 13,754
Amortisation of goodwill (5,446) (5,269)
Total operating profit 12,367 8,485
Profit on sale of subsidiary undertaking – Mainland Europe – 409
Net finance costs (2,801) (3,313)
Profit before taxation 9,566 5,581
A segmental analysis of amortisation of goodwill and net finance costs has not been disclosed as the directors are of the opinion that
its components cannot be meaningfully analysed across regions and classes of business.
c) Net assets
By class of business: Restated
Property 75,811 736 76,547 79,965
Transport & Infrastructure 37,465 1,134 38,599 42,242
Environmental 15,190 146 15,336 16,382
128,466 2,016 130,482 138,589
Share of net assets/(liabilities) of:
Associated undertakings 4,802 – 4,802 3,196
Joint ventures 115 – 115 28
Medium-term bank loans (49,279) – (49,279) (57,364)
84,104 2,016 86,120 84,449
By location of operations:
United Kingdom 35,482 – 35,482 46,382
Mainland Europe 72,277 2,016 74,293 70,797
United States of America 15,229 – 15,229 16,856
Africa 2,714 – 2,714 1,437
Asia 3,234 – 3,234 3,591
Other (470) – (470) (474)
128,466 2,016 130,482 138,589
Share of net assets/(liabilities) of:
Associated undertakings – Mainland Europe 4,802 – 4,802 3,196
Joint ventures – United Kingdom 115 – 115 28
Medium-term bank loans (49,279) – (49,279) (57,364)
84,104 2,016 86,120 84,449
The medium-term bank loans are shown separately as they service the Group as a whole. Notes to the Financial Statements – continued
For the year ended 31 December 2004
56 WSP Annual Report 2004
2 Total operating profit 2004 2003
£’000 £’000
Group and share of joint ventures and associated undertakings turnover continuing operations
Continuing operations 321,123 298,868
Acquisitions in the year 7,095 –
328,218 298,868
Less: share of turnover of joint ventures and associated undertakings – continuing operations (19,972) (15,315)
T urnover 308,246 283,553
Cost of sales (224,029) (205,856)
Gross profit 84,217 77,697
Administrative expenses (72,716) (69,434)
Group share of operating profit 11,501 8,263
Continuing operations 11,273 8,263
Acquisitions in the year 228 –
11,501 8,263
Share of operating profit of joint ventures and associated undertakings 866 222
Total operating profit 12,367 8,485
3 Exceptional item
In 2003, the Group made a provision of £2.25m against the uninsured element of a professional negligence claim relating to a building
completed in 1991.This amount was settled in 2004.Tax credits of £0.7m were recorded in 2003 in respect of this item.
4 Joint ventures and associated undertakings 2004 2003
£’000 £’000
Share of associated undertakings turnover 10,403 11,275
Share of joint ventures turnover 9,569 4,040
19,972 15,315
Operating profit of associated undertakings 771 353
Operating profit of joint ventures 95 (131)
866 222
Interest receivable 177 114
Interest payable (116) –
Share of profit on ordinary activities before taxation 927 336
Taxation on profit on ordinary activities (263) (100)
Share of operating profit on ordinary activities after taxation 664 236 WSP Annual Report 2004  57
4 Joint ventures and associated undertakings (continued) 2004 2003
£’000 £’000
Share of net assets of joint ventures and associated undertakings
Intangible assets – Goodwill 995 132
Tangible fixed assets 1,861 931
Current assets 8,828 7,471
11,684 8,534
Liabilities due within one year (5,991) (5,310)
Liabilities due in more than one year (776) –
4,917 3,224
Group turnover with joint ventures and associated undertakings 3,454 2,429
Included in joint ventures and associated undertakings’ current assets are:
Trading balances with WSP 105 3
Included in joint ventures and associated undertakings’ liabilities due within one year are:
Trading balances with WSP 1,246 20
The Group’s balances in respect of joint ventures and associated undertakings relate mainly to its 40% interest in Carillion WSP and its
24.7% interest in Multiconsult AS.
5 Net finance costs 2004 2003
£’000 £’000
Interest on loans and other borrowings wholly repayable within five years:
Bank overdrafts 395 567
Bank loans 2,597 3,118
Finance leases 70 76
Interest payable 3,062 3,761
Interest receivable and other similar income (261) (448)
Net finance costs 2,801 3,313
Net finance costs include amounts in respect of the joint ventures and associated undertakings as disclosed in Note 4.
6 Profit on ordinary activities before taxation 2004 2003
£’000 £’000
Is stated after charging/(crediting):
Property lease rentals 11,786 12,474
Equipment lease rentals 2,515 2,149
Auditors’ remuneration for the statutory audit 490 522
Other fees paid to the auditors:
Taxation services 42 96
Interim review 32 32
Other services – 24
Amortisation of goodwill 5,446 5,269
Depreciation of owned assets 5,337 5,872
Depreciation of assets held under finance leases 402 506
Research and development expenditure 2,492 2,293
Rents receivable (44) –
Loss/(Profit) on disposal of fixed assets 12 (1)
The audit fee for the Company was £58,000 (2003: £50,000) Notes to the Financial Statements – continued
For the year ended 31 December 2004
58 WSP Annual Report 2004
7 Directors and employees 2004 2003
£’000 £’000
Staff costs, including directors, were as follows:
Wages and salaries 147,875 132,700
Social security costs 24,986 23,097
Other pension costs 14,962 13,083
Contract and agency staff 11,043 10,197
Total staff costs 198,866 179,077
Number Number
The weekly average number of employees, contract and agency staff, including directors, was as follows:
Engineering and technical 4,801 4,583
Administration 406 387
Total staff 5,207 4,970
2004 2003
£’000 £’000
Aggregate emoluments of the directors of the Company was as follows:
Salaries and benefits 1,399 790
Pension contributions 248 138
Non executive directors’ fees 95 125
Aggregate emoluments 1,742 1,053
Aggregate gains on the exercise of long-term share incentive plans – 127
Full details of the directors’ emoluments, share options, long term incentive plans including gains on exercise and pension entitlements
are included in the Remuneration Report on pages 41 to 44.
8 Taxation
(a) Current tax 2004 2003
£’000 £’000
UK corporation tax on profits of the year at 30% (2003:30%) 2,293 2,125
Adjustments in respect of previous years 352 235
2,645 2,360
Foreign tax on profits of the year 1,618 1,038
Adjustments in respect of previous years (55) (247)
Share of tax of joint ventures and associated undertakings 263 100
Total current tax charge – note 8 (b) 4,471 3,251
Movement in deferred tax – note 16 306 178
Tax on profit on ordinary activities 4,777 3,429 WSP Annual Report 2004  59
(b) Factors affecting the current tax charge for the year
The tax assessed for the year is higher (2003: higher) than the standard rate of corporation tax in the UK (30% (2003:30%))
The differences are explained below: 2004 2003
£’000 £’000
Profit on ordinary activities before taxation and amortisation of goodwill 15,012 10,850
Amortisation of goodwill (5,446) (5,269)
Profit on ordinary activities before taxation 9,566 5,581
Profit on ordinary activities multiplied by the standard rate of corporation tax in the UK of 30% (2003: 30%) 2,870 1,674
Effect of different tax rates on overseas earnings (68) (109)
Expenses not deductible for tax purposes 595 692
Other timing differences (606) (813)
Adjustments to current tax charge in respect of previous periods 297 (12)
Unrelieved overseas losses – 238
Utilisation of brought forward overseas losses (251) –
Current tax charge before non deductible goodwill 2,837 1,670
Non deductible goodwill amortisation 1,634 1,581
Total current tax charge 4,471 3,251
The directors are not aware of any factors which may materially affect the future tax charge.
Further details of movements in deferred tax can be found in note 16.
9 Dividends 2004 2003
£’000 £’000
Interim dividend of 2.1p (2003: 2.0p) per share 1,269 1,197
Proposed final dividend of 3.2p (2003: 3.0p) per share 1,935 1,813
Total dividend of 5.3p (2003: 5.0p) per share 3,204 3,010
If approved at the Annual General Meeting, which is convened for 3 May 2005, the final dividend will be paid on 12 May 2005
to shareholders on the register of members at the close of business on 15 April 2005. Notes to the Financial Statements – continued
For the year ended 31 December 2004
60 WSP Annual Report 2004
10 Earnings per share
The directors believe that the presentation of an adjusted earnings per share, being the basic and diluted earnings per share adjusted for
amortisation of goodwill, assists with the understanding of the underlying performance of the Group.
Basic Adjusted Basic Adjusted
2004 2004 2003 2003
£’000 £’000 £’000 £’000
Profit for the financial year attributable to shareholders 4,580 4,580 2,062 2,062
Amortisation of goodwill – 5,446 – 5,269
Basic and Diluted earnings 4,580 10,026 2,062 7,331
No.‘000 No.‘000 No.‘000 No.‘000
Weighted average number of shares in issue 60,280 60,280 57,524 57,524
Basic earnings per share 7.6p 3.6p
Basic earnings per share before amortisation of goodwill 16.6p 12.7p
Diluted Adjusted Diluted Adjusted
2004 2004 2003 2003
No.‘000 No.‘000 No.‘000 No.‘000
Weighted average number of shares in issue 60,280 60,280 57,524 57,524
Dilution effects of shares to be issued 104 104 128 128
Dilution effects of share options 2,071 2,071 1,501 1,501
62,455 62,455 59,153 59,153
Diluted earnings per share 7.3p 3.5p
Diluted earnings per share before amortisation of goodwill 16.0p 12.4p
The weighted average number of shares in issue excludes 167,146 shares held by the WSP Employee Benefit Trust.
The dilutive effect of shares to be issued is calculated by reference to the market value of shares at the year end as applied to the total
performance related deferred consideration where conditions have been met at the year end.
11 Intangible assets
Intangible fixed assets comprise goodwill arising on the acquisition of businesses and subsidiaries, details of which are as follows:
The Group The Company
£’000 £’000
Cost at 1 January 2004 107,209 1,717
Additions 2,180 –
Translation differences on foreign exchange and other movements (635) –
Cost at 31 December 2004 108,754 1,717
Amortisation at 1 January 2004 14,653 360
Charge for the year 5,446 86
Translation differences on foreign exchange (433) –
Amortisation at 31 December 2004 19,666 446
Net book value
At 31 December 2004 89,088 1,271
At 31 December 2003 92,556 1,357
In accordance with the Group’s accounting policy, goodwill arising is capitalised and amortised over its estimated useful life which the
directors consider to be up to 20 years to reflect the nature of the businesses acquired and their prospective earnings stream. No
reinstatement has been made for goodwill written off prior to 1 January 1998 which amounted to £9.8m. WSP Annual Report 2004  61
12 Tangible fixed assets
Long Short Motor Office Fixtures
Freehold leasehold leasehold vehicles equipment & fittings Total
£’000 £’000 £’000 £’000 £’000 £’000 £’000
The Group
Cost at 1 January 2004 1,174 2,786 1,859 1,673 33,548 10,430 51,470
On acquisition of subsidiaries 18 – – 46 368 52 484
Additions during year 241 – 238 119 4,193 703 5,494
Disposals during year (48) (5) (8) (323) (5,033) (993) (6,410)
Foreign exchange differences 13 57 (93) 29 140 31 177
Cost at 31 December 2004 1,398 2,838 1,996 1,544 33,216 10,223 51,215
Depreciation at 1 January 2004 263 377 630 1,099 26,257 5,999 34,625
On acquisition of subsidiaries – – – 10 223 9 242
Charge for the year 29 28 211 218 3,968 1,285 5,739
Disposals during year (21) – (6) (273) (4,935) (934) (6,169)
Foreign exchange differences 3 – (15) 14 81 32 115
Depreciation at 31 December 2004 274 405 820 1,068 25,594 6,391 34,552
Net book value
At 31 December 2004 1,124 2,433 1,176 476 7,622 3,832 16,663
At 31 December 2003 911 2,409 1,229 574 7,291 4,431 16,845
The Company
Cost at 1 January 2004 and at 31 December 2004 – – 12 – 519 397 928
Depreciation at 1 January 2004 – – 10 – 494 271 775
Charge for the year ––1– 12 35 48
Depreciation at 31 December 2004 – – 11 – 506 306 823
Net book value
At 31 December 2004 ––1– 13 91 105
At 31 December 2003 ––2– 25 126 153
The net book value of Group fixed assets of £16.7m (2003: £16.8m) includes an amount of £0.6m (2003: £0.6m) in respect of assets
held under finance leases.
The net book value of Company fixed assets of £0.1m (2003: £0.2m) includes an amount of £Nil (2003: £Nil) in respect of assets held
under finance leases. Notes to the Financial Statements – continued
For the year ended 31 December 2004
62 WSP Annual Report 2004
13 Investments
The Group’s interest in joint ventures, associated undertakings and other investments was as follows:
Investment in
Other Investment in associated
investments joint ventures undertakings
Note 13 (a) Note 13 (b) Note 13 (b)
£’000 £’000 £’000
Value at 1 January 2004 1,164 28 3,196
Additions 148 – 1,254
Profit for year – 87 577
Dividends – – (169)
Reductions in carrying values (92) – –
Other movements (63) – (92)
Foreign exchange (67) – 36
Value at 31 December 2004 1,090 115 4,802
The Company’s interest in subsidiary undertakings was as follows:
Subsidiary
undertakings
Note 13 (c)
£’000
Cost at 1 January 2004 25,112
Additions 1,934
Capitalisation of intercompany loans to overseas subsidiaries 11,792
Cost at 31 December 2004 38,838
Provision at 1 January 2004 87
Charge for the year –
Provision at 31 December 2004 87
Net investments
At 31 December 2004 38,751
At 31 December 2003 25,025
(a) Other investments
Other investments primarily relate to the capital value of life assurance policies written on the lives of certain vendors of Flack + Kurtz
that were transferred to the Group at the time of the acquisition of that business, and minor other property interests.The cost of these
is not significantly different to the market value. WSP Annual Report 2004  63
(b) Principal joint ventures and associated undertakings
Group’s Class of Country of
interest shares held Registration Principal activities
Associated undertakings:
Gifford Graham & Partners Limited 50.0% ordinary England Civil engineering
Multiconsult AS 24.7% ordinary Norway Multi-disciplined consultancy
T alone AS 49.0% ordinary Estonia Structural building design
Joint ventures:
Ryan Hanley WSP Limited 50.0% ordinary Ireland Civil engineering
Carillion WSP 40.0% unincorporated England Civil engineering
Diarchon TSA 50.0% ordinary Greece Project management
Knowledge Based Management Limited 50.0% ordinary England Asset management planning
(c) Principal subsidiary undertakings
Unless otherwise indicated the following principal subsidiary undertakings are registered in England and Wales and operate throughout
the UK.
The Group’s interest entirely comprises ordinary equity shares.
Principal subsidiary undertakings Group’s interest Principal activities
WSP Buildings Limited 100% Multi-disciplined building design
WSP Civils Limited* 100% Civil engineering and network management
WSP Development Limited* 100% Infrastructure and transport planning
WSP Environmental Limited* 100% Environmental and geotechnical services
WSP Knowledge Solutions plc 100% Facilities management
WSP International Management Consulting Limited* 100% Management consultancy and infrastructure support
WSP Management Services Limited 100% Management services
WSP Remediation Limited* 100% Remediation of contaminated land
WSP Sweden AB* 100% Multi-disciplined consultancy, registered in Sweden
WSP LT Konsultit Oy* 100% Multi-disciplined consultancy, registered in Finland
WSP Kortes Oy* 100% Structural engineering design, registered in Finland
WSP Environmental Oy* 100% Environmental and geotechnical services, registered in Finland
WSP Cantor Seinuk Inc.* 100% Structural building design, registered in U.S.A.
Flack + Kurtz Inc.* 100% Building services design, registered in U.S.A.
Flack + Kurtz UK Limited* 100% Building services design
WSP Group South Africa (Pty) Limited* 100% Multi-disciplined building design, registered in South Africa
WSP Asia Limited 100% Multi-disciplined building design, registered in Hong Kong
WSP Hong Kong Limited* 100% Building services design, registered in Hong Kong
WSP Asia Philippines Inc* 100% Building services design, registered in Philippines
Shanghai WSP Consulting Limited – * 100% Building services design, registered in China
* The investment in these companies is held through subsidiary undertakings. Notes to the Financial Statements – continued
For the year ended 31 December 2004
64 WSP Annual Report 2004
14 Debtors
The Group The Company
2004 2003 2004 2003
£’000 £’000 £’000 £’000
Due within one year:
Trade debtors 60,817 54,359 34 40
Amounts recoverable on contracts 24,203 24,513 – –
Amounts due from group undertakings – – 97,328 136,767
Amounts due from joint ventures and associated undertakings 1,246 20 – –
Other debtors 3,734 3,311 60 147
Prepayments and accrued income 5,907 6,458 371 158
95,907 88,661 97,793 137,112
15 Creditors
The Group The Company
2004 2003 2004 2003
£’000 £’000 £’000 £’000
Due within one year:
Bank overdrafts 3,050 1,112 8,935 1,422
Bank loans 3,386 58,495 – 57,364
Property mortgage – 40 – –
Obligations under finance leases 336 378 – –
Trade creditors 10,490 10,244 239 63
Amounts due to joint ventures and associated undertakings 105 3 – –
Amounts due to group undertakings – – 9,375 10,606
Payments received on account 6,099 4,362 – –
Corporation tax 1,843 2,002 709 579
Other taxes and social security costs 12,042 10,179 11 145
Dividend payable 1,935 1,813 1,935 1,813
Other creditors and accruals 34,977 38,727 1,529 1,329
Deferred consideration – 19 – –
74,263 127,374 22,733 73,321
Due after more than one year:
Bank loans 48,766 81 23,800 –
Property mortgage – 489 – –
Future pension liabilities 1,881 – – –
Obligations under finance leases
– Between one and two years 207 419 – –
Deferred consideration – 38 – –
50,854 1,027 23,800 –
At 31 December 2003 creditors due within one year included the Group’s bank borrowings against the pre-existing £60m syndicated
loan facility that was due for renewal in May 2004. In February 2004, the Group renewed its medium-term bank facilities in order to
replace the £60m syndicated loan facility. Principal bank facilities were negotiated in the UK and Sweden and are made up of two lines
of credit of £30m, each comprising a £25m reducing revolving credit renewable in February 2007 and an overdraft of £5m.
The borrowings against the two £25m reducing revolving credits are now shown as creditors due after more than one year. WSP Annual Report 2004  65
16 Provisions for liabilities and other charges – Deferred taxation
Group Other
Accelerated short term
Work in capital timing 2004 2003
progress allowances differences T otal T otal
£’000 £’000 £’000 £’000 £’000
At 1 January 2004 6,424 (442) (808) 5,174 4,689
Charged during year 727 188 (609) 306 178
Translation differences on foreign exchange 72 – 26 98 307
At 31 December 2004 7,223 (254) (1,391) 5,578 5,174
Full provision has been made for deferred tax liabilities. In Sweden, a deferred tax liability of £7,223,000 (2003: £6,424,000) relates to
the value of work in progress written down to tax value in the individual entities but included at cost in the consolidated accounts.
Other short-term timing differences include in the United States, a deferred tax asset of  £927,000 (2003: £808,000) relating to short
term timing differences on disallowed provisions.
The Company has a deferred tax liability of £47,000 (2003: £47,000) relating to short term timing differences.
17 Provisions for liabilities and other charges – Other provisions
Group Vacant
Deferred property 2004 2003
consideration provisions T otal T otal
£’000 £’000 £’000 £’000
At 1 January 2004 676 194 870 6,558
Created during year 1,256 – 1,256 –
Release of unused provisions (30) (92) (122) –
Translation differences on foreign exchange 5 – 5 (271)
Provisions utilised during the year (410) – (410) (5,417)
At 31 December 2004 1,497 102 1,599 870
Deferred consideration may become payable depending on the future financial performance of certain businesses acquired. Provision
for this liability has been calculated on the basis that the maximum deferred consideration will fall due.
The provision for vacant properties relates to the rent, service charge and other associated costs should the properties remain vacant
for the duration of the lease or the next 10 years, whichever is the shorter.
In the Company accounts, provisions relate solely to vacant properties and amount to £102,000 (2003: £194,000).
18 Called up share capital
The share capital of the Company comprises 5p ordinary shares.
Authorised Allotted and fully paid
2004 2004 Issue 2004 2004
No ‘000 £’000 Price No ‘000 £’000
At 1 January 2004 70,000 3,500 60,446 3,022
Issued during the year
As deferred consideration for Walmsley Environmental 208.5p 13 1
At 31 December 2004 70,000 3,500 60,459 3,023 Notes to the Financial Statements – continued
For the year ended 31 December 2004
66 WSP Annual Report 2004
18 Called up share capital (continued)
The following number of shares to be issued in respect of acquisitions assumes that the performance targets set will be achieved and
therefore the maximum deferred consideration will become payable.The number of shares to be issued has been determined with
reference to the middle market share price at 31 December 2004 which was 260p (2003: 197.5p).
2004 2004 2003 2003
No ‘000 £’000 No ‘000 £’000
Shares to be issued 80 207 128 253
19 Reserves
Share Profit
premium Merger and loss
account reserve account
£’000 £’000 £’000
The Group
At 31 December 2003 76,510 – 4,665
Prior year adjustment – see note 30 – – (113)
At 1 January 2004 – as restated 76,510 – 4,552
Retained profit for the year – – 1,376
Loss on foreign exchange – – (514)
Performance share plan – – 619
Premium arising on issue of ordinary shares 27 – –
At 31 December 2004 76,537 – 6,033
The Company
At 31 December 2003 76,510 8,210 2,334
Prior year adjustment – see note 30 – – (113)
At 1 January 2004 – as restated 76,510 8,210 2,221
Retained profit for the year – – 633
Profit on foreign exchange – – 750
Performance share plan – – 619
Premium arising on issue of ordinary shares 27 – –
At 31 December 2004 76,537 8,210 4,223
The profit after tax for the Company for the year amounted to £3,837,000 (2003: £3,582,000). WSP Annual Report 2004  67
20 Acquisitions and disposals
In 2004, the Group acquired Inregia Intressenter AB, a group of companies providing planning services, Consulting Kortes OY, a group
of companies specialising in structural engineering design and EMP Projects OY, a group of companies providing environmental services.
The details of those transactions are summarised in the table below:
Book and
Percentage Initial fair value
Place of Date of of shares consideration Deferred of assets
Acquisition incorporation transaction acquired in cash consideration acquired Goodwill
£’000 £’000 £’000 £’000
Inregia Intressenter AB Sweden January 2004 100% 431 203 344 290
Consulting Kortes OY Sweden February 2004 100% 1,936 719 1,127 1,528
EMP Projects OY Finland June 2004 55% 107 334 79 362
2,474 1,256 1,550 2,180
In March 2003, the Group sold its interest in Intégria Certifiering AB, a wholly owned subsidiary providing certification and training
services, for £1,252,000 resulting in a profit to the Group of £409,000. The goodwill disposed of amounted to £455,000.
21 Reconciliation of operating profit to operating cash flows
2004 2003
£’000 £’000
Group share of operating profit 11,501 8,263
Depreciation 5,739 6,378
Amortisation of goodwill 5,446 5,269
Performance share plan 619 235
Loss/(profit) on disposal of tangible fixed assets 12 (1)
Movements in provisions (92) (743)
Changes in debtors (5,661) 2,221
Changes in creditors 6,458 (4,325)
Other movements – 4
Net cash inflow from operating activities 24,022 17,301
Major non-cash transactions entered into during the year were as follows:
The Group entered into or acquired finance leases with a total capital value of £148,000 (2003: £729,000).
22 Financing
2004 2003
£’000 £’000
Share issues 28 28
Other new loans/drawdowns on existing facilities 51,855 6,927
Bank loan and property mortgage repayments (58,491) (2,730)
Repayments on finance leases (422) (507)
Total financing (7,030) 3,718 Notes to the Financial Statements – continued
For the year ended 31 December 2004
68 WSP Annual Report 2004
23 Reconciliation of net cash flow to movement in net debt
2004 2003
£’000 £’000
(Decrease)/Increase in cash balances in the year (5,695) 4,442
(Increase)/Decrease in bank overdrafts in the year (1,938) 2
(Decrease)/Increase in cash in the year (7,633) 4,444
New finance leases (148) (730)
Net debt acquired with acquisitions (443) –
Finance lease repayments 422 507
Property mortgage repayments 529 114
New bank loans/drawdowns on existing facilities (51,855) (6,927)
Bank loan repayments 57,962 2,616
Movement in net debt resulting from cash flows (1,166) 24
Foreign exchange 740 1,037
Movement in net debt in the year (426) 1,061
Net debt at 1 January 2004 (44,570) (45,631)
Net debt at 31 December 2004 (44,996) (44,570)
24 Analysis of net debt
1 January Net cash Acquisitions Other Foreign 31 December
2004 flows (excluding cash) movements exchange 2004
£’000 £’000 £’000 £’000 £’000 £’000
Cash balances 16,444 (5,695) – – – 10,749
Bank overdrafts (1,112) (1,938) – – – (3,050)
15,332 (7,633) – – – 7,699
Due within one year
Property mortgage (40) 40––– –
Bank loans (58,495) 6,107 (443) 48,685 760 (3,386)
Finance leases (378) 210 – (148) (20) (336)
Due after one year
Property mortgage (489) 489––– –
Bank loans (81) – – (48,685) – (48,766)
Finance leases (419) 212––– (207)
(44,570) (575) (443) (148) 740 (44,996) WSP Annual Report 2004  69
25 Pensions
a) SSAP 24 ‘Accounting for Pension Costs’
The Group operates both defined contribution and funded defined benefit pension schemes.The Group’s defined benefit schemes
(which are closed to new members) consist of the WSP Group plc Retirement Benefit Scheme, the Graham Consulting Group
Retirement Benefit Scheme, the Donald Rudd & Partners Pension Fund, the Cairns & Byles Pension Scheme, the Brian Ford Partnership
Employee Benefits Scheme and the James Carrington Pension Plan.
The assets of the defined contribution and defined benefit schemes are held in separate independently administered funds.
Contributions to the Group’s defined benefit pension schemes are charged to the profit and loss account so as to spread the cost of
pensions over the employees’ working lives with the Group.The contributions are determined by independent qualified actuaries on
the basis of triennial valuations principally using the projected unit method.
The Group’s pension cost amounted to £15.0m (2003: £13.1m) of which £13.2m (2003: £11.6m) related to defined contribution and
£1.8m (2003: £1.5m) to defined benefit schemes. Contributions of £102,000 (2003: £28,000) were outstanding at the balance sheet
date. Included in the pension charge for the year is an amount of £524,000 (2003: £336,000) in respect of the amortisation of historic
experience deficits/(surpluses) that are being recognised over the average remaining service lives of employees.
SSAP 24 requires the disclosure of the most recent actuarial valuations of the Group’s pension funds, which are normally carried out
every three years by independent professionally qualified actuaries.The effective dates of the most recent valuations were between
November 2001 and May 2004.The assumptions which have the most significant effect on the results of the valuations are those
relating to the rate of return on investments which range from 5.0% to 7.5%, the rates of increase in salaries which range from nil to
5.0% and the rates of increase in pensions which range from 2.3% to 2.8% .These valuations showed that the market value of the
schemes assets were £32.8m and that the actuarial value of those assets represented 85% of the benefits that had accrued to
members, after allowing for expected future increase in earnings.The contributions of the Group and employees will be 24.3% and
9.7% of earnings respectively.
WSP Sweden is partly responsible for its staff occupational pension scheme. At 31 December 2004 the company’s liability to long-term
pensions commitments was £1.9m which is secured and guaranteed by a mutual credit insurance company. Substantial other assets to
meet the full pension liabilities are held within a Government run scheme and as the directors are unable to identify the underlying
assets and liabilities it has been treated as a defined contribution scheme for the purposes of disclosure.
b) FRS 17 ‘Retirement Benefits’
The Group still accounts for pension costs under SSAP 24, as the Board has decided to defer full implementation of FRS 17 following
the UK Accounting Standards Board proposal to extend the transitional regime for the new Standard. FRS 17 requires pension fund
valuations to be updated by actuaries at each balance sheet date using different criteria to SSAP 24, and on this basis the defined
benefit schemes in existence in the UK show a net deficit, after deferred tax relief, of £10.5m (2003: £14.2m).This improvement
follows measures taken during the year to increase contributions and, in consultation with the members of the schemes, to freeze for
an initial three year period, the level of salary to which the schemes apply. The amount of this net pension liability would have a
consequential effect on reserves.
Set out below are the FRS 17 valuations, together with the assumptions used by the actuaries, which due to the timescale covered,
may not necessarily be borne out in practice.These valuations show the best estimates of the fair value of the schemes’ assets at the
balance sheet dates, which are not intended to be realised in the short term and may be subject to significant change before they are
realised, together with the present value of the schemes’ liabilities, which are derived from cash flow projections over long periods and
are thus inherently uncertain.The anticipated rate of return on scheme investments is also disclosed.
The major assumptions used in these valuations were: 2004 2003 2002
Rate of increase in pensionable salaries nil 4.0% 3.8%
Rate of increase in pensions in payment 2.5% 2.5% 2.3%
Discount rate 5.4% 5.6% 5.4%
Inflation assumption 2.5% 2.5% 2.3% Notes to the Financial Statements – continued
For the year ended 31 December 2004
70 WSP Annual Report 2004
25 Pensions (continued)
FRS 17 valuations and anticipated return on investments:
Anticipated Anticipated Anticipated
return on return on return on
investments Valuation investments Valuation investments Valuation
2004 2004 2003 2003 2002 2002
£’000 £’000 £’000
Equities 8.0% 21,007 8.2% 20,481 8.2% 16,680
Bonds 4.6% 5,230 4.7% 4,806 5.2% 5,853
Property 8.0% 559 8.2% 1,005 8.0% 452
Other assets 5.8% 10,011 3.8% 7,068 6.0% 6,064
Fair value of schemes’ assets 36,807 33,360 29,049
Actuarial value of schemes’ liabilities (51,851) (53,634) (48,377)
Pension deficit (15,044) (20,274) (19,328)
Related deferred tax asset 4,513 6,082 5,798
Net pension liability under FRS 17 (10,531) (14,192) (13,530)
Had the Group adopted FRS 17 in full, profit and loss reserves would have been adjusted as follows:
Analysis of amount charged to operating profit in respect of defined benefit schemes
2004 2003
£’000 £’000
Current service cost 698 906
Settlements and curtailments (7,018) 14
Total operating charge (6,320) 920
Movement in deficit during the year
Deficit in the schemes at the beginning of the year (20,274) (19,328)
Movement:
Current service cost (956) (906)
Contributions 1,684 1,413
Settlements and curtailments 7,018 (14)
Other finance income (600) (672)
Actuarial loss (1,904) (767)
Deficit in the schemes at the end of the year (15,032) (20,274)
Analysis of the amount credited to other finance income
Expected return on pension scheme assets 2,385 2,077
Interest on pension scheme liabilities (2,985) (2,749)
Net return (600) (672)
Analysis of amount recognised in statement of total recognised gains and losses
Actual return less expected return on pension scheme assets 334 1,954
Experience gains and losses arising on the scheme liabilities (555) 328
Changes in the assumptions underlying the present value of the scheme liabilities (1,683) (3,049)
Actuarial loss recognised in the statement of total recognised gains and losses (1,904) (767) WSP Annual Report 2004  71
History of experience gains and losses
The following disclosures will be built up over time as a five year history: 2004 2003 2002
Difference between the actual and expected return on scheme assets
Amount (£’000) 334 1,954 (6,733)
Percentage of scheme assets 1% 6% (23%)
Experience gains and losses on scheme liabilities
Amount (£’000) (555) 328 (1,911)
Percentage of the present value of scheme liabilities 1% (1%) 4%
Changes in the assumptions underlying the present value of scheme liabilities
Amount (£’000) 1,683 (3,049) (1,051)
Percentage of the present value of scheme liabilities (3%) 6% 2%
26 Financial Instruments
The explanation of the Board’s objectives, policies and strategies for holding and issuing financial instruments is set out in the Group
Finance Director’s Review on pages 8 to 11.
Short term debtors and creditors, as permitted by FRS 13, have been omitted from all of the numerical financial instruments
disclosures, except for those relating to foreign currency risks.The Group and the Company have £10.7m and £1.0m respectively of
cash at the year end held in bank accounts (2003: £16.4m the Group, £0.1m the Company) which is immediately available for use.
Functional currency of the local operation
The Group The Company
2004 2004 2003 2003 2004 2003
£’000 £’000 £’000 £’000 £’000 £’000
Cash at bank at year end by major currency Sterling Other Sterling Other Sterling Sterling
Sterling 1,916 46 8,639 – – 88
US Dollars 609 2,853 450 988 – 43
Swedish Kronor 342 834 – 4,886 – –
Euro – 1,761 – 843 – –
South African Rand – 1,240 – 684 – –
Other 792 356 – (46) – –
3,659 7,090 9,089 7,355 – 131
Cash surplus to short term requirements is usually invested overnight on the money market to earn interest at rates close to the
prevailing local base rates.
a) Liquidity
The maturity of financial liabilities is as follows:
The Group The Company
2004 2003 2004 2003
£’000 £’000 £’000 £’000
In one year or less, or on demand 7,125 60,424 8,935 58,786
In more than one year but not more than two years 18,432 452 – –
In more than two years but not more than five years 31,409 544 23,800 –
In more than five years 2,157 327 – –
59,123 61,747 32,735 58,786 Notes to the Financial Statements – continued
For the year ended 31 December 2004
72 WSP Annual Report 2004
26 Financial Instruments (continued)
In addition to medium-term bank loans the Group has negotiated working capital facilities with local relationship banks in the countries
in which it operates.
These facilities are negotiated annually and are normally repayable on demand. At 31 December 2004 committed but undrawn
working capital facilities amounted to £16.7m (2003: £10.7m) of which £0.5m is renewable in one year or less and £16.2m is
renewable in more than one year (2003: £8.1m in one year or less and £2.6m was in more than two years).
b) Interest rate risk profile of financial liabilities
Floating Fixed Non-interest Floating Fixed Non-interest
rate rate bearing rate rate bearing
liabilities liabilities liabilities T otal liabilities liabilities liabilities T otal
2004 2004 2004 2004 2003 2003 2003 2003
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Sterling 23,800 186 50 24,036 45,500 359 50 45,909
US Dollars 2,797 58 – 2,855 12,917 107 – 13,024
Swedish Kronor 27,757 – 3,297 31,054 18,128 45,401 613 64,142
Hong Kong Dollars 461 – – 461 651 – – 651
South African Rand 685 – 32 717 787 163 71 1,021
55,500 244 3,379 59,123 77,983 46,030 734 124,747
In 2003 the interest rate risk profile shown in the table above took into account various interest rate and currency swaps which have
all been closed during 2004.
The floating rate liabilities apply to short and medium-term bank overdrafts and loans with interest rates falling within the range 0.75%
to 1.5% over the relevant country national bank base rates.
The fixed rate liabilities apply to sundry small loans to overseas subsidiaries and finance leases with a weighted average interest rate of
between 7% and 9%.
The weighted average period on which interest rates on the fixed rate financial liabilities are fixed is 3 years (2003: 3 years).
The Group’s worldwide banking facilities are secured by fixed and floating charges over a variety of the Group’s assets including cross-
guarantees from subsidiaries.
Finance lease obligations are secured on the assets to which they relate.
c) Swaps and hedges
The Swedish Kronor swap used to hedge the Group’s investment in the Swedish subsidiary was closed during the year at a cash
outflow of £6.8m.
There were no outstanding currency swaps or derivatives at 31 December 2004.
d) Currency risk
The analysis of the Group’s net monetary assets denominated in other than the functional currencies of the local operation may be
summarised as follows:
Functional currency of the local operation
Sterling Others T otal Sterling Others T otal
Net foreign currency monetary assets 2004 2004 2004 2003 2003 2003
£’000 £’000 £’000 £’000 £’000 £’000
US Dollars 560 30 590 450 – 450
Swedish Kronor 341 – 341 –––
Other 375 1,829 2,204 478 – 478
1,276 1,859 3,135 928 – 928 WSP Annual Report 2004  73
e) Fair values
The fair value of financial assets and liabilities of the Group with the exception of the 3 year interest rate fixing swap contracts in 2003
were and are considered to be materially equivalent to their book value.The fair values of these interest rate fixing swaps are shown
below.
Fair Value Book Value Fair Value Book Value
2004 2004 2003 2003
£’000 £’000 £’000 £’000
Interest rate fixing swaps –– (560) –
The figures shown above were derived from third party valuations as at the balance sheet date.
27 Guarantees, contingent liabilities and other commitments
At the year end the Company and certain of its subsidiary undertakings cross guarantee the bank loans of the Group.
In common with other professional firms, the Group maintains professional indemnity insurance against claims for professional negligence
which in the ordinary course of business have been, or may in the future be, received.The directors assess each claim and make
provision for legal and settlement costs where, on the basis of advice received, it is considered that a liability may exist.
No other commitments, either authorised or contracted for, existed at 31 December 2004.
At the year end there existed the following annual commitments under operating leases which expire:
The Group The Company
2004 2003 2004 2003
£’000 £’000 £’000 £’000
Equipment and plant:
Within one year 724 655 16 16
Between two and five years 2,163 1,314 – –
2,887 1,969 16 16
Property:
Within one year 1,067 803 114 74
Between two and five years 10,570 9,353 675 901
After more than five years 1,009 1,519 – 35
12,646 11,675 789 1,010
28 Related party transactions
During the year the Group entered into arm’s length transactions with its joint ventures and associated undertakings.Turnover with
these companies amounted to £3.5m (2003: £2.4m) and the Group purchased services of £Nil (2003: £0.1m).
At 31 December 2004 a net balance of £1,141,000 (2003: £17,000) was due from joint ventures and associated undertakings to the
Group.
As disclosed in the Directors’ Report, the Group has entered into arm’s length transactions in the normal course of its business with
companies with which the non-executive Directors are associated by virtue of their employments.These Directors have no controlling
influence over these companies or a material interest in the outcome of these contracts.
Certain senior employees are entitled to receive deferred consideration payable in cash and shares in respect of the acquisition of
businesses in which they formerly held equity interests. At 31 December 2004, the maximum total due to these senior employees was
£1,257,000 (2003: £986,000), subject to meeting performance targets. Notes to the Financial Statements – continued
For the year ended 31 December 2004
74 WSP Annual Report 2004
29 Share options, the performance share plan and the bonus share plan
At 31 December 2004 outstanding options and awards to subscribe for ordinary shares of 5p each in the Company, granted in
accordance with the rules of the relevant share option schemes, the bonus share plan and the performance share plan were as follows:
Exercise SAYE Ordinary Performance Bonus
Exercise or vesting date price Options Options plan awards plan awards Total
No No No No No
WSP Group plc 1997 Save As You Earn scheme
11.04.2001-11.04.2004 420.0p 3,227 3,227
11.04.2002-11.04.2005 300.0p 149,301 149,301
WSP Group plc 1997 Share Option Scheme
08.04.2001-08.04.2008 91.0p 70,696 70,696
30.06.2003-30.06.2009 183.0p 89,879 89,879
26.05.2004-26.05.2010 242.0p 150,161 150,161
06.04.2004-06.04.2011 429.0p 302,515 302,515
06.04.2005-06.04.2012 334.0p 371,750 371,750
10.04.2006-10.04.2013 75.0p 104,500 104,500
WSP Group plc 1997 Performance Share Plan
01.04.2005 – 206,455 206,455
01.04.2006 – 1,190,000 1,190,000
01.04.2007 – 300,000 300,000
WSP Group plc 1997 Deferred Bonus Share Plan
01.04.2005 – 2,275 2,275
20.05.2005 – 6,017 6,017
01.04.2006 – 308,293 308,293
01.04.2007 – 17,482 17,482
152,528 1,089,501 1,696,455 334,067 3,272,551
In accordance with the rules of the various WSP Share Option Schemes the number and price of options have been subject to
appropriate adjustment to reflect the impact of the rights issue in June 2001.
a) Ordinary Options
The exercise of ordinary options are contingent upon meeting performance targets set by the Remuneration Committee that
presently require Earnings Per Share to grow by at least the equivalent to the increase in the Retail Price Index plus, on average,
3% per annum.
b) Performance Share Plan and Deferred Bonus Share Plan – The WSP Employee Benefit Trust
The Group operates the WSP Performance Share Plan and the WSP Deferred Bonus Share Plan for the benefit of its executive
directors and senior management. The WSP Employee Benefit Trust, which was set up in 1997, holds ordinary shares in the Company
to meet commitments in respect of the share awards granted under these schemes.The shares of the Trust are presented as a
deduction in shareholders’ funds in accordance with UITF 38.
WSP Group plc has provided loans totalling £1,529,141(2003: £1,529,141) to the Trust in the form of interest free loans to enable the
Trust to purchase shares in the Company. Subsidiary undertakings of the Group will make cash contributions to the Trust which will
be used to repay the loans.
The cost of the potential future awards of the two schemes is accrued over the 3-year performance periods of each plan.The cost of
future awards charged in 2004 in the accounts of WSP Group plc was £619,425 (2003: £234,654). WSP Annual Report 2004  75
As at 31 December 2004 the Trust owned 167,146 ordinary shares of the Company (2003: 167,146), all of which are due for transfer,
at nil exercise price, to directors and senior management under the conditions of the Performance Share Plan and the Deferred Bonus
Share Plan.The performance conditions applicable to awards granted under the Performance Share Plan are set out in the
Remuneration Committee Report.The market value of each share held at 31 December 2004 was 260p per share (2003: 197.5p).
All shares held are reserved to meet existing commitments under the employee incentive schemes.
Scheme Scheme
shares at Granted in Vested in Lapsed in shares at
1 January Year Year Year 31 December
2004 2004
No No No No No
Performance Share Plan 1,546,357 300,000 – (149,902) 1,696,455
Deferred Bonus Share Scheme 347,430 17,482 (14,178) (16,667) 334,067
T otal 1,893,787 317,482 (14,178) (166,569) 2,030,522
30 Change to accounting policies
UITF Abstract 38 Accounting for ESOP Trusts has been adopted in the current year. UITF 38 requires that investments in own shares
previously disclosed in Fixed Assets Other Investments are presented as a deduction in shareholders’ funds.The 2003 comparatives
have been restated and £162,000 of prior years’ amortisation has been reversed.The table below sets out the effect of the change on
the 2003 results.
Consolidated Balance Sheet £’000
Fixed Assets Other Investments – as previously stated 1,277
Prior year adjustment (113)
Fixed Assets Other Investments – restated 1,164
Equity shareholders’ funds – as previously stated 84,562
Prior year adjustment (113)
Equity shareholders’ funds – restated 84,449
There was no material impact on the profit and loss account. 76 WSP Annual Report 2004
Five Y ear Review
Consolidated profit and loss accounts
2004 2003 2002 2001 2000
£’000 £’000 £’000 £’000 £’000
Group and share of joint ventures and associated
undertakings turnover 328,218 298,868 272,024 230,545 137,925
Less: share of turnover of joint ventures and associated undertakings (19,972) (15,315) (10,574) (5,812) –
Turnover 308,246 283,553 261,450 224,733 137,925
Operating profit on ordinary activities before
exceptional items and goodwill 17,813 16,004 14,451 17,502 10,945
Exceptional items – (2,250) (6,505) – –
Amortisation of Goodwill (5,446) (5,269) (5,128) (3,592) (844)
Operating profit 12,367 8,485 2,818 13,910 10,101
Profit on sale of subsidiary undertaking – 409–––
Net finance costs (2,801) (3,313) (2,444) (2,408) (1,352)
Profit before tax 9,566 5,581 374 11,502 8,749
Taxation (4,777) (3,429) (1,988) (4,696) (3,127)
Profit/(loss) after tax 4,789 2,152 (1,614) 6,806 5,622
Minority interests (209) (90) (17) – (21)
Dividends (3,204) (3,010) (2,662) (2,657) (1,560)
Retained profit/(loss) for the year 1,376 (948) (4,293) 4,149 4,041
Basic earnings/(loss) per share 7.6p 3.6p (3.1p) 14.9p 14.8p
Basic earnings per share before operating exceptional items
and profit on sale of subsidiary undertaking 16.6p 15.0p 15.2p 22.7p 17.0p
Consolidated balance sheets
2004 2003 2002 2001 2000
£’000 £’000 £’000 £’000 £’000
Restated Restated Restated Restated
Fixed assets 111,758 113,789 115,815 120,662 42,772
Current assets 106,656 105,105 103,245 98,571 70,652
218,414 218,894 219,060 219,233 113,424
Creditors due within one year (74,263) (127,374) (66,789) (63,824) (63,622)
Debtors due after more than one year – – – 7,594 –
Total assets less current liabilities 144,151 91,520 152,271 163,003 49,802
Long term liabilities and provisions (58,031) (7,071) (66,097) (67,464) (18,086)
Net assets 86,120 84,449 86,174 95,539 31,716
Called up share capital 3,023 3,022 2,662 2,657 1,752
Share premium account 76,537 76,510 71,253 70,976 10,190
Shares to be issued 207 253 5,769 7,748 8,761
Profit and loss account 6,033 4,552 6,468 14,158 10,789
Equity shareholders’ funds 85,800 84,337 86,152 95,539 31,492
Minority interests – equity 320 112 22 – 224
86,120 84,449 86,174 95,539 31,716 
Design by Accrue
Produced by Imprima de Bussy Contents
WSP is a global business with the vision to be the
outstanding supplier of specialist and integrated
services in the built and natural environment.
01 Financial Highlights
02 Chairman’s Statement 
04 Chief Executive’s Review
08 Group Finance Director’s Review
12 Operational Review
13 United Kingdom
17 Europe
19 United States of America
21 International
23 Environmental
24 Creating Sustainable Value for Stakeholders
28 Our People
30 Board of Directors
32 Performance Committee
33 Directors’ Report 
37 Corporate Governance Report 
41 Remuneration Report 
45 Auditors’ Report
46 Consolidated Profit and Loss Account 
47 Balance Sheets 
48 Consolidated Cash Flow Statement 
49 Statement of Group T otal 
Recognised Gains and Losses 
49 Reconciliation of Movements 
in Group Equity Shareholders’ Funds 
50 Accounting Policies
54 Notes to the Financial Statements
76 Five Y ear Review 
Principle Offices
UK and Registered Office
WSP Group plc
Buchanan House
24-30 Holborn
London
EC1N 2HS
UK
Tel + 44 (0)20 7314 5000
Fax + 44 (0)20 7314 5111
WSP Group plc is registered in England.
Company Number: 2136404
EUROPE
WSP Sweden
121 88 Stockholm-Globen
Arenavagen 7
Stockholm
Sweden
T el + 46 (0)8 688 6000
Fax + 46 (0)8 688 6999
AFRICA
WSP South Africa
WSP House
Ariel Business Park
Simba Road
Sunninghill
Sandton 2157
Johannesburg
South Africa
Tel + 27 (0)11 233 7800
Fax + 27 (0)11 803 7430
Advisers
STOCKBROKERS
Hoare Govett Limited
250 Bishopsgate
London
EC2M 4AA
SOLICITORS
Nabarro Nathanson
Lacon House
Theobald's Road
London
WC1X 8RW
AUDITORS
PricewaterhouseCoopers LLP
1 Embankment Place
London
WC2N 6RH
REGISTRARS
Capita IRG plc
The Registry
34 Beckenham Road
Beckenham
Kent
BR3 4TU
PRINCIPAL BANKERS
Barclays Bank plc
50 Pall Mall
London
SW1A 1QB
Fleet National Bank
1185 Avenue of the Americas
New Y ork 10036
USA
HSBC Bank plc
70 Pall Mall
London
SW1Y 5EZ
FöreningsSparbanken AB (Swedbank)
Brunkebergstorg 8
105 34 Stockholm
Sweden
USA
Flack + Kurtz
475 Fifth Avenue
New Y ork
NY 10017
USA
Tel + 1 212 532 9600
Fax + 1 212 689 7489
WSP Cantor Seinuk
3rd Floor
228 East 45th Street
New Y ork
NY 10017
USA
Tel + 1 212 687 9888
Fax + 1 646 487 5501
ASIA
WSP Asia
1/F, K. Wah Centre
191 Java Road
North Point
Hong Kong
Tel + 852 2217 2000
Fax + 852 2802 9626
Further information regarding WSP office addresses can be found on our website: www.wspgroup.com
This Report is printed on both Challenger Art and Challenger Offset paper. These papers are sourced from sustainable forests, totally
chlorine free (TCF), suitable for recycling, and suitable for archive storage.
Accreditations: 
Page 3 © Esto, Page 6 © BAA, Page 16 (Middle) © Mikael Ullén, Page 16 (Bottom) Courtesy of Costain Ltd and the Highways Agency, Page 18 (T op) © Timothy Hursley,
Page 18 (Bottom) © Jane Gosney, Page 22 (Top) Image courtesy of: Assael Architecture Ltd, Page 22 (Middle) Image courtesy of: BDP , Page 26 © Timothy Hursley. Annual Report
WSP Group Plc Annual Report and Accounts 2004
WSP Group plc
Buchanan House
24-30 Holborn
London
EC1N 2HS
UK
Tel +44 (0)20 7314 5000
Fax +44 (0)20 7314 5111
www.wspgroup.com