Amec order intake jumps 20 per cent as market improves

AMEC, the British oil services and engineering group, said orders were up by a fifth following an improvement in customer spending.

The FTSE 100 company, whose customers include BP, Royal Dutch Shell and EDF said its order book stood at £3.55bn at the end of April, compared to £3.17bn at the end of December.

“Improving market sentiment and recovery in key customers’ capital expenditure is expected to continue to support the group’s overall performance through 2010,” Amec said.

The order book is expected to strengthen as the year progresses on the back of a solid project pipeline, providing good visibility for the second half of 2010, into 2011 and beyond, the firm added.

AMEC noted that orders for the period include the recently announced three-year extension of the Shell ONEgas joint venture contract in the Southern North Sea, worth €200m a year. The company’s orders for the period also include the front end engineering and design contract for Chevron’s Mafumeira Sul project, offshore Angola, which is expected to run through to mid-2011.

Amec, which is currently looking for acquisitions as part of a drive to double earnings per share by 2015, said it remained on track to deliver its target of a margin of 8.5 per cent on earnings before interest tax and amortisation in 2010.

“We continue to be well positioned on contracts at the early stage of the project cycle and are confident that this will support continued growth,” said chief executive Samir Brikho.

Shares in Amec closed at 822p yesterday, valuing the company at £2.66bn.

In March this year AMEC posted a 13 per cent rise in 2009 earnings before tax, interest and amortisation (EBITA). “2010 is expected to be another challenging year... There is expected to be increasing pricing pressure from customers,” Amec said at the time.