Amec's margin surge

With metals prices in decline, it was no surprise that the proportion of group revenues generated from the mining industry in both the Americas and Amec's "growth regions" contracted; in the case of the latter, to just 11 per cent, from 22 per cent in the corresponding period in 2012. However, changes to North Sea tax laws helped to boost activity within Amec's oil services business, while the Americas benefited from good levels of demand in conventional oil & gas and clean energy contracts. Amec also benefited from lower procurement costs which, combined with cost savings linked to the restructuring, helped to deliver a 4 per cent increase in trading profits to £158m, based on a 40 basis point increase in margins to 7.9 per cent

Amec said full-year revenues should be in line with those of 2012, having earlier forecast low-to-mid single-digit growth, although the group brought forward its target of achieving earnings per share of 100p by a year to 2014. By the year-end, Amec should have a clearer picture of its potential involvement with French utility giant EDF for the UK's next generation of nuclear power plants.

Prior to these figures, JPMorgan Cazenove expected 2013 EPS of 87p (from 80.4p in 2012).