Engineering group on the hunt for acquisitions
OIL services and engineering group Amec posted a 20% rise in first-half profits and has seen customer spending returning in most of its key markets.
The firm, which employs more than 1,000 staff in the region, says it is on the lookout for further acquisitions after its purchase of Newcastle-based environmental and engineering consultancy Entec for £60m in March.
Amec’s revenues for the first half of 2010 came in at £1.4bn, up 13% with pre-tax profits up by 20% to £113.5m.
Chief executive Samir Brikho said: “Amec has delivered a record first-half performance, with 6% organic revenue growth and improvements in each of the three divisions.
“We expect this momentum to continue, building on our strong customer relationships. New contract wins and improvements in the order book signal a further strengthening in our strategic position across core sectors.
“Our balance sheet remains strong and we continue to invest in carefully targeted acquisitions. The interim dividend has been increased by 20% and reflects the board’s continuing confidence in the group’s prospects.
Shares in Amec, which have outperformed Britain’s blue-chip index by almost 13% in 2010, gained over 5% to 890p in yesterday’s trading.
Chief financial officer Ian McHoul said: “We see a story of gradual improvement to our pipeline. Right across the board we are seeing projects that were delayed in the past starting to be discussed.”
He said that in addition to seeing more bidding activity, Amec in many cases was engaged in direct negotiations with customers rather than just trying to win contracts.
“That knowledge of what’s going on is giving us confidence,” McHoul said.
Amec, which is looking for acquisitions as part of a drive to double earnings per share by 2015, said it was in talks about potential takeovers.
“We don’t limit ourselves to small, medium or large (deals), what we have been doing is looking at how much shareholder value it will create. If it will create good shareholder value, we are ready for it,” said chief executive Samir Brikhor
Amec believes Entec, which was spun out of Northumbrian Water in 2005, is a perfect fit and has plans to take the organisation on to the global stage.
Entec has 13 offices in the UK and employs 700 staff with expertise in the water, waste, energy and infrastructure developments. As well as Entec Amec has 300 staff in Darlington, 100 in Stockton and a dozen in Wallsend.