News Column

Pound wipes millions off Amec's profit

August 8, 2014

By Rob Davies, Daily Mail, London

Aug. 08--The strong pound and acquisition costs combined to push down profits at engineer Amec, which also trimmed its expectations for the rest of the year.

Revenues were 7pc lower at pounds sterling 1.85bn, while pre-tax profit was down 29pc to pounds sterling 83m, due partly to pounds sterling 29m in costs linked to the acquisition of US rival Foster Wheeler.

Amec also said the deal would now complete in the fourth quarter rather than the third, as the burden of queries from the Securities and Exchange Commission proved heavier than expected.

The group which provides services for industries including oil, renewable energy, mining and nuclear laid out the impact of Sterling's strength.

It expects the currency effect to shave pounds sterling 250m off revenues and pounds sterling 25m off underlying profit for the year, with the impact felt particularly keenly in the US and Canada.

But chief executive Samir Brikho pointed to an order book that was 16pc higher at pounds sterling 4.2bn and sang the praises of the Foster Wheeler deal, particularly with regard to the company's expertise in shale gas.

'Shale gas represents a good opportunity for us in the future and that's where Foster Wheeler technology comes in. That's why we're doing it,' he said. 'We made a good deal at the right moment.' He also hailed the patriotic novelty value of a British predator buying out a US-listed firm. 'From a British point of view this is the best story ever.'

Amec (down 4p to 1085p) had a tough year in its oil and gas division, as it winds down towards the end of the key Kearl oil sands project in Canada, but said other areas were making up for the loss of income, including clean energy and the Middle East.

Brikho also expects recovery in nuclear, where use of the technology cooled in light of the Japan'sFukushima disaster.

The interim dividend was raised by 10pc to 14.8p a share.


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Source: Daily Mail (London, England)

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