£90.4m profits for Amec

Aug 29 2008 by Alex Turner, Liverpool Daily Post

CHESHIRE support services and engineering group Amec has reported a massive jump in half-year profits to £90.4m.

The Knutsford-based group’s pre-tax profits rose 87% in the half-year to June 30 on the back of a strong performance in the energy market.

Amec employs 16,000 staff worldwide in 40 countries, including 460 at its head office and nuclear division base in Knutsford and 270 in Warrington, which provides environmental services and is the centre for its radio chemical laboratories.

The nuclear division generated sales of £129m in the first half of 2008. It is part of Amec’s power and process division, which has increased its minimum gross margin on new contracts to 10%.

Amec is part of a consortium, called Nuclear Management Partners, which last month was selected as the preferred bidder for an initial five-year contract to manage five nuclear North West sites including Sellafield. The contract is worth up to £50m a year to the consortium.

The group said it expects each of its core businesses to deliver further performance improvement in the second half of 2008 and believes it will meet its upgraded margin of 6.5%, up half a percentage point, for the year.

It has also raised its group margin target for 2010 from 8% to 8.5%.

Chief executive Samir Brikho said: “These record results further demonstrate the strength of our businesses and the speed with which Amec is improving its performance.

“Our average net cash position has never been stronger, and is expected to stand at over £600m for the year. The strength of our balance sheet in the current credit crisis, coupled with the attractiveness of the end markets we serve, confirms our confidence in the future.”

In 2008 it has made seven acquisitions totalling £121m, including a UK consultancy and a Slovakian nuclear services firm, and its strong cash position means it is well-postitioned.

Amec plans to “make selective acquisitions consistent with its strategy of geographic and capacity expansion”.

Shares in AMEC have gained around one-third of their value since a January low of 634p. Yesterday, the shares finished the day up 1.4% to 835p.

alex.turner