The recent rally in Amec Foster Wheeler 's (AMFW) shares was further boosted by a 7 per cent gain on the publication of full-year results. This was in part due to the £946m net debt figure, which came in below guidance and analyst forecasts. The engineering services group, which has been dogged by concerns over its borrowings, is now fixed on cutting the debt pile by half in 2016.
To do that, Amec is putting a number of non-core assets up for sale, including its power equipment business, the Global Power Group. However, any eventual sales price is now likely to be slimmer after a downgrade in future profit forecasts caused Amec to book a £308m non-cash impairment charge against the division.
Still, these numbers will also allay fears over Amec's exposure to the oil and gas sector. More than 80 per cent of the contracts won since the interim results came from outside the sector, and contributed to a 5 per cent uptick in the order book to £6.6bn.
Canaccord, which believes these results should end any speculation of a rights issue, is forecasting full-year adjusted EPS of 53.8p and operating earnings of £329m, against 68p and £373m for 2015.
AMEC FOSTER WHEELER (AMFW) | ||||
|---|---|---|---|---|
| ORD PRICE: | 503p | MARKET VALUE: | £1.96bn | |
| TOUCH: | 503-504p | 12-MONTH HIGH: | 1,003p | LOW: 322p |
| DIVIDEND YIELD: | 5.8% | PE RATIO: | NA | |
| NET ASSET VALUE: | 410p* | NET DEBT: | 59% | |
| Year to 31 Dec | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 3.30 | 259 | 63.3 | 30.5 |
| 2012 | 4.01 | 254 | 65.2 | 36.5 |
| 2013 | 3.97 | 255 | 63.8 | 42.0 |
| 2014 | 3.99 | 155 | 36.1 | 43.3 |
| 2015 | 5.46 | -235 | -66.1 | 29.0 |
| % change | +37 | - | - | -33 |
Ex-div: 26 May Payment: 4 Jul *Includes intangible assets of £3bn, or 776p a share. | ||||
