Amec enjoys boost despite North Sea tax

Kasmira Jefford
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AMEC, the engineering and support services group, said a surge of activity in the North Sea oil fields and growth in the mining and renewables sectors helped it post higher first-half core earnings and bolstered its order book.

Samir Brikho, Amec’s chief executive said the UK government’s North Sea tax raid announced in the March budget forced companies in the oil sector “to go back to the drawing board in terms of what it means for business and investments”.

Amec, nevertheless, said the North Sea remained active and the company had hired as many as 2,000 employees this year in London and Aberdeen to meet new contract wins from companies including BP and BG.

The FTSE 100 company, which serves the oil, gas and power generation industries, reported earnings for the six months to June of £122m on revenue four per cent higher at £1.48bn.

The UK, its largest market, accounted for 31 per cent of revenues, driven by oil and gas, nuclear, power and environmental services.

Its order book was £3.4bn, up from £3.25bn in April, although slightly down on a year ago because of an expected reduction in a US contract.

In May, the company announced the $280m (£172m) acquisition of US project management company Mactec, its largest takeover since Brikho took hold of the reigns in 2006.

Amec, which has made £261m of acquisitions in the year, said it will continue to look for more opportunities.

Chief financial officer Ian McHoull said despite economic uncertainties, Amec was “confident in the outlook for the business” and raised its dividend by 40 per cent to 10.2p a share.

Amec fell 4.31 per cent to close at 876p yesterday.