Engineering a profit in face of downturn
ENGINEERING firm AMEC, which employs more than 700 people at two North East sites, said it was on course to make a pretax profit in excess of £200m and was pressing ahead with recruitment, despite the downturn.
In a trading update, the company, which manages the Sellafield nuclear plant as part of a consortium that won a £1.3bn-per-year clean-up contract from the Government last year, said it had a strong order book to see it through 2009, particularly in the natural resources division, which includes its Wynyard offices.
A spokesman said a multi-million pound project with the National Oil Company of Kazakhstan, secured at the end of 2008, had added to £1.7bn of orders for the division - up 40% from a year ago, leading to a 11% increase in staff.
Although its power and process activities were focused more on margin than volume - with a target margin of 8.5% for 2010 - a spokesman said it anticipated having ‘a major role to play’ in the UK’s new-build nuclear programme, which will be accelerated by French-based EDF’s successful bid for plant operator British Energy at the start of the year.
A spokesperson for the nuclear division, which includes workers at Darlington, said: “We are looking to expand the business in the short to medium term. We are already working with EDF on a new reactor design and hopefully we will have a major role to play in the nuclear build programme. It’s optimistic on the nuclear front for companies like Amec.”
Notwithstanding a global slowdown in merger and acquisition (M&A) activity, the company, which bought Slovak specialist nuclear services firm AllDeco last summer for £11.1m, said it was expecting to make ‘further selective acquisitions’ in 2009.
The markets welcomed the news yesterday with an immediate boost to the share price, which closed 34.5p up, to 572p. Some analysts revised their profit forecasts, which had ranged from £193m to £205, and said the price could reach 697p.
Samir Brikho, chief executive, said Amec had seen “only minor delays and cancellations of prospective projects compared with those we would have expected to see normally”.
