AMEC Drops Despite 37% Revenue Growth

Published in Company Comment on 9 August 2012

AMEC lifts its interim dividend and expects double-digit full-year growth.

Amec plc (LSE: AMEC) -- the global supplier of consultancy, engineering and project-management services -- is currently down 6.4% despite releasing strong half-year results this morning. Revenue was up 37%, at £2,026 million, with pre-tax profit up 25%, at £126 million.

Although underlying revenue growth in the second half of 2012 is expected to be significantly lower than the first, AMEC remains set to deliver good underlying revenue growth for the full year.

The group's order book currently stands at £3.7 billion, almost 9% higher than this time last year, and the firm says demand for its services continues to be strong, despite on-going economic uncertainty. The board's confidence in the longer term was demonstrated by a 15% increase to the interim dividend, which was raised to 11.7p per share.

Chief Executive Samir Brikho said:

"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. This flowed into EPS, which was up 25 per cent at 36.1 pence, and operating cash flow -- where we also achieved a good performance."

"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 ongoing 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."

Even with this morning's fall, AMEC remains more than 16% up year-to-date, and its record of growth suggests the upward trend should continue. This morning's fall might, therefore, seem a chance to buy on slight weakness.

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> Jon Wallis doesn't own shares in AMEC.

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