AMEC sees revenues jump in the first half

Engineering and consultancy group AMEC said it is on track for double-digit underlying revenue growth this year as sales jumped by over a third in the first half, driven by a strong performance in the oil, gas and mining sectors.

Revenue surged by 37% from £1,484m to £2,026m in the six months to June 30th, up 28% on an underlying basis (which excused the impact of current and acquisitions).

This growth was assisted by the incremental impact of procurement activities on certain natural resources contracts; without this, underlying sales would have increased by 15%.

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Earnings before interest, tax and amortisation (EBITDA) increased by 25% from £122m to £152m, while pre-tax profits rose by the same rate from £101m to £126m. The group said that the strong growth was recognised in spite of lower-than-expected profits from key performance indicator targets (KPIs) on Kearl initial development in Alberta, Canada, due to schedule delays.

EBITDA margin fell from 8.2% to 7.5% since the first half of 2011 as expected, as a result of the increase in procurement activities and a shift in the work mix in the Natural Resources division. These issues will mean that the second-half margin will be lower than last year. though it is still expected to improve on the first half.

Operating cash-flow jumped by 89% from £75m to £142m. The dividend per share was hiked by 15% from 10.2p to 11.7p.

"AMEC has had an excellent start to the year, with revenue growth boosted by phasing of project execution and procurement in our oil & gas and mining businesses in particular," said Chief Executive Samir Brikho.

"The order book has been maintained at record levels. We see continued demand for our services, and this has not been significantly impacted by the on-going economic uncertainty. Second-half revenues are anticipated to be maintained at broadly the same level as the first half, leaving us on track to deliver double-digit underlying revenue growth for the full-year. We expect to continue to deliver good growth in 2013," Brikho said.

BC