AMEC yesterday announced a £400m share buyback and hiked its dividend on the strength of its 2011 profits.
The engineer, which is a consultant to energy industry big hitters including Centrica and ConocoPhillips, said it had been buoyed by a string of acquisitions and was on the hunt for more.
AMEC posted full-year earnings before interest, tax and amortisation (Ebitda) of £299m, 12 per cent higher than in 2010.
The company is debt free and has been lining up a buyback for some time.
A strong performance in the North Sea, a contract win on the decommissioning of Sellafield nuclear plant in northern England, plus a 21 per cent jump in earnings in the part of AMEC’s business which provides consulting and engineering for environmental and water projects, helped boost profits.
Chief financial officer Ian McHoul told City A.M: “Commodities have been hot and that has given us a boost.
“We see this trend continuing. Acquisitions have really helped us as has the fact that we have such a diversified business.
“When some parts of the business are not performing, others are.”
He added that the surging oil price triggered by Middle Eastern unrest has helped stoke the company’s profits.
AMEC, which said the buyback would take place over 12 months, also said it planned to lift its full year dividend to 30.5p per share from the 26.5p in 2010.
McHoul said that despite the buyback, the company had acquisitions in its sights and would not “run away from debt” to bankroll them.
“Debt is not a bad thing we have a strong balance sheet and are looking for the right opportunities.”
JAMES AGNEW UK CORPPRATE BROKING
The team from Deutsche Bank advising AMEC on its buyback was led from London by chairman of UK corporate broking James Agnew.
He also advised AMEC on its £173m takeover bid for MACTEC in May last year. A veteran banker, Agnew currently sits on the Takeover Panel and has had a prolific City career. He also advised Kraft on its bid for Cadbury. He joined Deutsche in 2002, having previously been head of corporate broking at Merrill Lynch from 1995. Mark Astaire at Bank of America Merrill Lynch was joint adviser to Amec.