Davis Langdon鈥檚 parent company reports loss following a 拢200m writedown on the value of its European and management consulting businesses

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Aecom has reported a $58.6m (拢36.9m) loss after a $317m (拢200m) writedown on the value of its European and management support services businesses.

The US consultant and parent company of Davis Langdon said it had made the writedowns after reviewing the 鈥済oodwill鈥� value of all its global businesses.

鈥淕oodwill鈥� is an accounting term for the non-capital value of businesses, including company reputation and staff skills, and is typically calculated based on forecast future revenue and profit.

Aecom said the European writedown resulted from the 鈥渘egative impact of economic trends鈥� in the region which 鈥渄rove a reduction in profit levels鈥�.

Aecom鈥檚 chief financial officer Stephen Kadenacy told analysts on a conference call today that the European business had been 鈥渂uffeted by challenging economic conditions, particularly in the UK.鈥�

Aecom has significantly increased its presence in Europe in recent years through a number of acquisitons, including the $324m (拢203.6m) takeover of UK-based consultant Davis Langdon in August 2010.

The writedown on the value of its Management Support Services business was down to a 鈥渓oss of revenue鈥� providing support to the US army in Iraq as troops began to withdraw from the country this year, the firm said.

Kadenacy said the writedowns reflected a 鈥渃onservative forecast鈥� and the firm 鈥渃an鈥檛 see鈥� that there鈥檒l be further goodwill writedowns in future.

Aecom鈥檚 revenue was up 2% to $8.22bn (拢5.18bn) for the financial year ended 30 September 2012, up from $8bn (拢5.1bn) the previous year.

The firm improved its operating margin to 12.1% and also announced it is investing $62m (拢39m) to repurchase 3 million shares.

Aecom president Michael Burke said the firm sees most growth potential in the health sector worldwide, delivering major international events and in public private partnership-funded schemes.

Aecom is hoping to win 鈥渕any more鈥� assignments in Brazil as a result of masterplanning the Rio 2016 Olympics, particularly on related infrastructure work, he said.

He added the firm is working with bid teams for 鈥渁 few countries鈥� positioning to host the 2020 Olympics. 

He said the firm had increased the average value of projects it is delivering in Europe.

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