Thursday 17 November
AMEC plc Interim Management Statement
· Year-to-date trading continues to be in line with expectations
· Order intake and forward visibility remain good
· Order book strong at £3.3 billion (31 October 2010: £3.1 billion; 30 June 2011: £3.4 billion)
· Integration of four acquisitions year-to-date progressing well
AMEC Chief Executive Samir Brikho said:
"AMEC continues to make good progress in 2011, reflecting in particular a strong performance in the oil and gas and mining sectors.
"Although we remain alert to the current macro-economic uncertainty, demand for our services and investment in our end markets remain strong and we are confident that this will support continued growth.
"Management remains focused on maximising shareholder value through the delivery of Vision 2015, which includes pursuing further selective value-enhancing acquisitions."
Unless specifically addressed, guidance remains unchanged from that notified with the interim results.
A conference call for analysts and investors will be hosted by Ian McHoul, Chief Financial Officer today at 8.30 am.
Next events: AMEC is hosting a lunch for SRI investors and analysts on 29 November.
AMEC expects to announce preliminary results for the year ending 31 December 2011 on Thursday 21 February 2012.
Analyst consensus estimates are collated and published on AMEC's website on a periodic basis amec.com/investors/key facts.
AMEC plc: +44 (0) 20 7539 5800
Samir Brikho, Chief Executive
Ian McHoul, Chief Financial Officer
Sue Scholes, Director of Communications
Nicola-Jane Brooks, Head of Investor Relations
Brunswick Group LLP: + 44 (0)20 7404 5959
Forward looking statements
Any forward looking statements made in this document represent management's best judgment as to what may occur in the future. However, the group's actual results for the current and future fiscal periods and corporate developments will depend on a number of economic, competitive and other factors, some of which will be outside the control of the group. Such factors could cause the group's actual results for future periods to differ materially from those expressed in any forward looking statements made in this document.
Interim Management Statement 17 November 2011
Year-to-date trading across the group continues to be in line with expectations.
Order intake remains strong and includes a mix of new contract awards, scope changes to existing contracts and negotiated work providing good visibility into 2012 and beyond. The order book was £3.3 billion at 31 October (31 October 2010: £3.1 billion; 30 June 2011: £3.4 billion).
New contract wins since August reflect the increased activity in the energy and natural resources markets as well as the extension of core capabilities into new geographies. These include:
· Activity in the North Sea market continues to build and in October, AMEC announced two important contracts. New customer GDF SUEZ E&P UK Ltd awarded AMEC the £50 million front end engineering design (FEED) contract for the Cygnus gas field development. In addition, AMEC was appointed to deliver the engineering and project management services for the main platform design for Clair Ridge, west of Shetland. This work, worth £150 million, is part of the BP global offshore framework agreement.
· Additionally, in oil and gas, the AMEC Clough JV was awarded a two-year contract extension, worth approximately £65 million, by ConocoPhillips to provide operations and maintenance services to the Bayu Undan facilities located in the Timor Sea.
· Demand for mining services continues. In Western Australia, Fortescue Metals Group selected AMEC and its partners for an engineering, procurement and construction (EPC) contract for the Cloudbreak ore handling plant. AMEC's scope, worth £36 million, involves detailed engineering, procurement of equipment and site support.
· AMEC has extended its clean energy capabilities to new geographies winning its first biomass project in South Africa. Paper producer Sappi appointed AMEC to perform engineering, procurement, construction management (EPCM) services for its GoCell project. In addition, INEOS Bio selected AMEC to be its global licence support engineering firm as the company rolls out its licencing programme for its waste-to-bioenergy technology.
· Finally, AMEC was awarded two new nuclear decommissioning contracts in the UK, which have expanded its consulting capabilities. They are a three-year contract to supply radiological, environmental and site characterisation support to the Sellafield site in Cumbria, and a four-year decommissioning contract for the Magnox Limited Trawsfynydd nuclear site. This latter contract was awarded to AMEC's ACTUS joint venture.
The average number of employees was 25,400 in the period January to October (January to October 2010: 21,900 employees). AMEC completed four acquisitions in the first half. Taking into account the timing of acquisitions, the average number of employees in the 10 months to October 2011 grew by 3,500 people. Integration of all acquisitions is on track.
Financial position and net cash
The group remains in a strong financial position. Net cash at the end of October was c. £430 million (31 October 2010: £680 million; 30 June 2011: £455 million).
Demand for AMEC's services and investment in end markets remains strong, and new contract awards are expected to support future growth, despite macro-economic uncertainty.
Looking ahead to 2012, AMEC is firmly focused on growing EPS by significantly improving revenues while maintaining margins at around 9 per cent.
The balance sheet is strong and management remains focused on maximising shareholder value through the delivery of Vision 2015, which includes pursuing further selective value-enhancing acquisitions.