AMEC beats forecast but gives cautious outlook for 2013

Engineering and project management group AMEC hiked its dividend by a fifth after beating forecasts in 2012, but warned of more modest growth this year.

Engineering and project management group AMEC hiked its dividend by a fifth after beating forecasts in 2012, but warned of more modest growth this year.

The company, which works internationally in the oil & gas, mining, clean energy, environment and infrastructure markets, raised its dividend per share for the full year by 20% from 30.5p to 36.5p.

Revenue for the 12 months to December 31st totalled £4,158m, up 28% on the £3,261m recorded in 2011 and ahead of Canaccord Genuity's forecast of £4,010bn.

Underlying revenue excluding incremental procurement rose 12%, helped by a strong performance within the Natural Resources division (which accounts for over half of group revenues) which rose 20% on an underlying basis.

Reported revenues in the division surged 39% to £2,416m with good growth in both oil & gas and mining.

"A strong performance in conventional oil & gas in the UK North Sea and the Gulf of Mexico and in mining throughout the Americas was further boosted by incremental procurement (£320m) on three key projects."

Group EBITA (earnings before interest, tax and amortisation) rose 11% year-on-year from £299m to £331m, ahead of the £327m estimated by Canaccord. Adjusted earnings per share (EPS) rose 14% to 80.4p, above with the 79.7p forecast.

Operating cash flow improved by 16% year-on-year to £309m.

Cautious outlookChief Executive Samir Brikho said that the company made "good progress" in 2012, and remains on track to achieve its profit target of EPS of at least 100p ahead of 2015.

However, underlying revenue growth (exc. procurement) is expected to slow to a "low-to-mid single digit" rate.

The company expects a strong performance in conventional oil & gas but "more modest" growth in the clean energy and environment & infrastructure markets in the Americas.

Oil sands revenue is forecast to reduce and the company also warned of softening demand in the mining market.

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