AMEC delivered a strong set of half-year figures, together with a substantial hike in the dividend, but its shares slipped following the results announcement. This was probably a reaction to a 70 basis point reduction in the margin, but resilient demand has kept the specialist engineer on track to achieve double-digit revenue growth for the full-year.
AMEC's revenues beat consensus expectations by 14 per cent, largely as a result of improved performance within its oil & gas and mining sectors. Admittedly, some of the contracts undertaken in oil & gas centred on mature lower-margin regions, such as the North Sea, but cash profits still rose by a quarter to £152m.
Managers expect the rate of revenue growth to contract markedly during the remainder of 2012, but margins should partially recover. Persistent delays at the group's Kearl oil sands project continue to cause concern, but analysts note that the group's earnings visibility remains undiminished as it has managed to maintain its order backlog at a record £3.7bn since the year-end, despite the wider economic malaise.
AMEC forked out £156m to fund acquisitions, and a similar sum to cover share buy-backs, but its cash position remains healthy, aided by an 89 per cent increase in operating cash-flows.
BoA/Merrill Lynch expects 2012 EPS of 74.9p (2011: 70.4p)
| AMEC (AMEC) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,092p | MARKET VALUE: | £3.5bn | |
| TOUCH: | 1,091-1,092p | 12-MONTH HIGH: | 1,189p | LOW: 733p |
| DIVIDEND YIELD: | 2.9% | PE RATIO: | 16 | |
| NET ASSET VALUE: | 373p* | NET CASH: | £290m | |
| Half-year to 30 Jun | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 1.48 | 101 | 24.5 | 10.2 |
| 2012 | 2.03 | 126 | 30.6 | 11.7 |
| % change | +37 | +25 | +25 | +15 |
Ex-div:28 Nov Payment:02 Jan * Includes intangible assets of £978m, or 309p a share | ||||
