UPDATE 1-Scott Wilson eyes overseas acquisitions

(Adds analyst reaction, share price)

By Paul Sandle

LONDON, June 26 (Reuters) - British engineering consultancy Scott Wilson Group (SWG.L) is targeting overseas acquisitions after another year of revenue, profit and margin growth bolstered its balance sheet, it said on Thursday.

"Our priority has been to get the margin up before growing the top line," Chairman Geoff French told Reuters in an interview. "But we are now looking for carefully selected companies, with an international flavour or an environmental flavour."

The company, which has contracts for London's Crossrail and 2012 Olympics, more than halved net debt to 7.0 million pounds ($13.8 million) in the year to April 27, and increased its bank facilities to 70 million pounds, he said.

Panmure Gordan analyst Mike Allen, who has a 'buy' recommendation on the stock, said the company had delivered a solid set of results, with pretax profit rising 40 percent to 23.9 million pounds, just ahead of his forecast.

But the significant reduction in debt was the highlight, he said, and caused him to nudge up his price target to 279 pence from 274 pence.

"Given the strong balance sheet with recently increased banking facilities of 70 million pounds (currently 10 times current net debt), we would expect Scott Wilson to re-enter the M&A market, which should provide further upside to our forecasts," he said.

Finance Director Sean Cummins told Reuters the group is looking to add about 30 million pounds of revenues a year through acquisition.