Shareholders in specialist engineer AMEC are reaping the rewards of the group's expansion within its oil, gas and mining segments, receiving a bumper 15 per cent rise in the dividend and the return of £400m through a buy-back programme over the next 12 months.
AMEC managed to grow revenues in all its business divisions and reported a 11 per cent rise in adjusted pre-tax profits to £311m. Operating margins of 9.1 per cent remained in line with 2010, although management expects them to contract in the current year due to changes in the business mix. The group is moving away from Canadian oil sands in favour of North Sea oil & gas contracts, as evidenced by the recent tie-up with BP on the Clair Ridge project.
Guidance is for “double-digit underlying revenue growth” this year which is underpinned by a 20 per cent rise in AMEC’s forward order book, which stood at £3.7bn by the year-end. Future revenue streams were also helped along by £263m worth of acquisitions during 2011 and buoyed by cash rich balance sheet expect further deals.
Broker Charles Stanley notes that consensus 2012 EPS forecasts of 78p (2011: 70.5p) are in line with AMEC's guidance, but "there may be room for uplift from acquisitions."
| AMEC (AMEC) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,101p | MARKET VALUE: | £3.7bn | |
| TOUCH: | 1,100-1,102p | 12-MONTH HIGH: | 1,223p | LOW: 733p |
| DIVIDEND YIELD: | 2.8% | PE RATIO: | 17 | |
| NET ASSET VALUE: | 412p* | NET CASH: | £521m | |
| Year to 31 Dec | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2007 | 2.36 | 152 | 36.9 | 13.4 |
| 2008 | 2.61 | 307 | 64.5 | 15.4 |
| 2009 | 2.54 | 204 | 47.6 | 17.7 |
| 2010 | 2.95 | 259 | 73.0 | 26.5 |
| 2011 | 3.26 | 259 | 63.3 | 30.5 |
| % change | +11 | - | -13 | +15 |
Ex-div: 29 May Payment: 2 July *Includes intangible assets of £848m, or 254p a share | ||||
