11th Mar 2008 07:02
AMEC PLC11 March 2008 11 March 2008 AMEC plc Preliminary Results 2007 RECORD RESULTS AND CASH POSITION • Strong performance by the group's three core divisions • Adjusted pre-tax profit *1 £126.5 million, up 59% • Profit for the year £344.4 million (2006: £219.2 million) • 5.1% EBITA margin *2 (2006: 4.1%); on track to deliver 2008 margin target of 6% • Diluted earnings per share *3 from continuing operations 28.0 pence, up 69% • Dividends per share up 10% to 13.4 pence • Average net cash 2007 £435 million; 2008 expected to be c.£600 million *4 Commenting today, Chief Executive, Samir Brikho, said: "These are excellent results. Our margin performance sets a new record for AMECand puts us firmly on track to deliver our target of six per cent in 2008. "Following the successful transformation of the group in 2007, our net cashposition stands at a record level. Our prospects have never been stronger. Theoutlook in our markets remains strong, and we are delivering significantimprovements in our performance." Page 1 Financial highlights: 2007 2006 £ million £ millionContinuing operations: Revenue 2,356.2 2,121.6 +11% Profit before intangible amortisation, exceptionalitems and income tax *1 126.5 79.7 +59% Profit/(loss) before income tax 151.6 (27.0) nm Profit from discontinued operations - includingprofit on disposals 222.9 261.4 -15% Diluted earnings per share from continuingoperations before intangible amortisation and exceptional items 28.0p 16.6p +69% Diluted earnings/(loss) per share from continuingoperations 36.1p (13.3p) nm Dividends per share 13.4p 12.2p +10% nm not meaningful Any forward looking statements made in this document represent management's bestjudgement as to what may occur in the future. However, the group's actualresults for the current and future fiscal periods and corporate developmentswill depend on a number of economic, competitive and other factors, some ofwhich will be outside the control of the group. Such factors could cause thegroup's actual results for future periods to differ materially from thoseexpressed in any forward looking statements made in this document. Results presentation and live webcast AMEC will host a presentation on the preliminary results for analysts and investors at 8.30am today. A live webcast of the event and presentation slides will be available onwww.amec.com. Enquiries to: AMEC plc: + 44 (0)20 7539 5800Samir Brikho, Chief ExecutiveStuart Siddall, Finance DirectorSue Scholes, Director of CommunicationsNeil Jamieson, Director of Investor RelationsMedia:Frank Stokes, Media Relations Manager Notes: *1 For continuing operations before intangible amortisation of £2.5 million(2006: £3.6 million) and pre-tax exceptional income of £28.2 million (2006:charges of £102.8 million) but including joint venture profit before tax of £1.8million (2006: £0.2 million). *2 For continuing operations before net financing income/(costs), intangibleamortisation, pre-tax exceptional items and £12.4 million one-off costs of STEPChange (2006: £nil) but including joint venture profit before tax, as apercentage of revenue. *3 For continuing operations before intangible amortisation and exceptionalitems. *4 Before acquisitions and share buybacks. Page 2 Results Revenue for the year increased by 11 per cent to £2,356.2 million (2006:£2,121.6 million), reflecting strong growth in both the Natural Resources andPower and Process divisions. Underlying growth in revenues, excluding oil andgas lump-sum contracting (now ceased), and the Investments and other activitiesdivision (where various businesses were sold or closed during 2007) was 21 percent in 2007, being almost entirely organic. Adjusted pre-tax profit *1 of £126.5 million was up £46.8 million (2006: £79.7million), with all core divisions performing strongly. There was pre-tax exceptional income of £28.2 million (2006: charge of £102.8million), intangible amortisation of £2.5 million (2006: £3.6 million) and jointventure tax of £0.6 million (2006: £0.3 million), resulting in a pre-tax profitof £151.6 million (2006: loss of £27.0 million). Profit for the year (including profit on disposal of discontinued businesses)was £344.4 million (2006: £219.2 million). Diluted earnings per share from continuing operations, before intangibleamortisation and exceptional items, were 11.4 pence higher than in 2006 at 28.0pence (2006: 16.6 pence). The board is recommending a final dividend of 8.8 pence per share (2006: 8.0pence) which, together with the interim dividend of 4.6 pence per share (2006:4.2 pence), results in a total dividend of 13.4 pence per share (2006: 12.2pence), an increase of 10 per cent. This represents a dividend cover *2 of 2.1times and is in line with the board's stated policy of rebuilding sustainabledividend cover to a level of over two times. Outlook AMEC's end markets in the energy, power and process sectors remain strong, andsignificant progress is expected in each of the group's core divisions. Theboard remains confident that AMEC will deliver the six per cent EBITA margintargeted for 2008. Performance in 2008 will benefit from further savings of £29million arising from the STEP Change programme - by the end of 2008 thisprogramme will have generated annualised total net savings of £40 million. Thegroup's Operational Excellence programme will be a major contributor to AMECdelivering its target margin of eight per cent in 2010. The group expects to spend around £100 million on acquisitions during the firsthalf of 2008. Overall, the board expects to make significant progress in 2008, in line withits expectations at the time of AMEC's pre-close trading update on 13 December2007. *1 For continuing operations before intangible amortisation of £2.5 million(2006: £3.6 million) and pre-tax exceptional income of £28.2 million (2006:charges of £102.8 million) but including joint venture profit before tax of £1.8million (2006: £0.2 million). *2 Based on adjusted diluted earnings per share before intangibleamortisation and exceptional items. Page 3 The group's end markets in the energy, power and process sectors are expected toremain strong. The group's Operational Excellence programme will be a majorcontributor to AMEC delivering its target margin of 8 per cent in 2010. AMEC expects to make a statement on current trading on Wednesday, 14 May 2008,the day of the company's annual general meeting. Basis of preparation and discontinued activities As previously disclosed, the Built Environment businesses, now sold, have beentreated as discontinued operations in the 2007 accounts. The comparativesegmental results for the year ended 31 December 2006 have been restated toreflect this change and some minor business restructuring. These restatementsare consistent with those disclosed on 25 June 2007, except for a change inclassification of the Wind Developments business. This has been transferred outof the Power and Process division and into the Investments and other activitiessegment. Segmental review Segmental analysis is provided for the group's continuing activities in theNatural Resources, Power and Process and Earth and Environmental divisions. The Investments and other activities division includes past activities in Rail(now sold), Hong Kong (now substantially reduced), US Construction Management(all projects now completed) and a plant hire business (sold in February 2008),together with two ongoing PPP activities in Korea and the UK. It also nowincludes the Wind Developments business (formerly reported in the Power andProcess division). Amounts and percentage movements relating to continuing segmental earningsbefore net financing income/(costs), tax and intangible amortisation ('EBITA')are stated before corporate costs of £36.5 million (2006: £21.4 million) andpre-tax exceptional income of £28.2 million (2006: charges of £102.8 million),but including joint venture profit before tax of £1.8 million (2006: £0.2million). The average number of employees for the years ended 31 December 2007 and 31December 2006 stated in this review include agency staff. Amounts relating to segmental net assets / (liabilities) are stated beforeintangible assets and net cash, but including interests in joint ventures andassociates. Page 4 Natural Resources Natural Resources comprises AMEC's activities in Oil and Gas Services, Oil Sands(project management, engineering and infrastructure) and Metals and MineralsMining. Services include asset development and asset support, includingconsultancy and engineering design, project management, commissioning andoperational support. The split of 2007 revenue between Natural Resources' three principal areas ofactivity was as follows: Oil and Gas Services 67 per cent, Oil Sands (projectmanagement, engineering and infrastructure) 18 per cent and Metals and MineralsMining 15 per cent. Some 50 per cent of revenues in 2007 were generated by eachof asset development ('capex') and asset support ('opex') services. £ million 2007 2006 change------------------ ---------- ---------- -----------Revenue 1,014.8 818.0 *1 +24%EBITA 95.5 59.1 *1 +62%EBITA margin 9.4% 7.2% *1 +31%------------------ ---------- ---------- -----------Net assets 28.8 71.3 -60%Order book £1.21bn £1.03bn +17%Average number of employees *2 9,715 8,317 +17% *1 Excluding lump-sum fabrication, now ceased (2007: revenue and EBITA£nil; 2006: revenue £102.9 million, EBITA £nil). *2 Full time equivalents, including agency staff. Natural Resources performance in 2007 was strong in each of its principal areasof activity but was strongest in North America (Oil and Gas Services, CanadianOil Sands Infrastructure and Minerals and Metals Mining). Revenues in 2006 included £102.9 million in respect of lump-sum fabricationactivities in the Oil and Gas Services business, from which AMEC has nowwithdrawn. Commentary below therefore excludes this activity from thecomparative data. Revenue for the period was £1,014.8 million (2006: £818.0 million), with the 24per cent increase for the year being entirely organic. EBITA increased by 62 percent to £95.5 million (2006: £59.1 million). EBITA margin of 9.4 per cent (2006:7.2 per cent) comfortably exceeded the 2008 target range of 7-8 per centoriginally set in December 2006 and reflected strength in Natural Resources endmarkets together with improvements in both capex and opex margins during theyear. The Natural Resources order book increased despite strong growth in revenuesduring 2007, and at £1.21 billion, was 17 per cent up on the position at the endof 2006. During the year, new awards included a five-year consultancy and engineeringservices contract with the Kuwait National Petroleum Company covering upgrades,refurbishment and modifications on Kuwait's three existing refineries; front-endengineering design and management of the winter drilling programme for ImperialOil at their Kearl Oil sands project in Canada and contracts from PotashCorp Page 5 for engineering, procurement and construction management services on the Cory mineexpansion and Picadilly project in Canada. In January 2008, AMEC announced major contracts, awarded in December 2007, inthe UK North Sea and Nigeria. In the North Sea, AMEC was awarded a contract byFairfield Energy to be the Duty Holder on the Dunlin cluster of oilfieldproduction facilities. The contract will run for the life of the field, which isestimated to be between 10 and 15 years. In Nigeria, Mobil Nigeria awarded AMECa contract for project/construction management services on the Mobil IntegrityProject. Natural Resources outlook Natural Resources end markets remain buoyant and the board expects the divisionto make strong progress in 2008. In Oil and Gas Services, activity levels are expected to remain high in allregions. In the UK North Sea, existing brownfield services and operations andmaintenance activities will be augmented by increasing levels of higher marginduty holder activity, which represents a growth opportunity for AMEC. The Canadian oil sands market for engineering and infrastructure services isexpected to remain particularly strong, being driven by continued high levels ofinvestment. During 2008, AMEC expects to expand its activities in the in-situsector through acquisition. The Minerals and Metals Mining business is expected to remain strong, withramping up of contracts in South America and continued high levels of activityin Canada. Given the strength of both margin performance in 2007 and the outlook for 2008,the margin target range for Natural Resources in 2008 was increased to 9-10 percent in December 2007, up from the 7-8 per cent range set in December 2006. Thedivision is targeting an EBITA margin of 10-11 per cent in 2010. Page 6 Power and Process Power and Process includes AMEC's activities in power and process markets andnuclear. The business designs, delivers, enhances and maintains infrastructurefor a broad range of clients in the public and private sectors. The split of 2007 revenue between each of the three principal end markets inPower and Process was broadly as follows: process 50 per cent, power 25 percent, and nuclear 25 per cent. £ million 2007 2006 change------------------- ----------- ----------- ----------Revenue 1,009.1 794.7 +27%EBITA 38.9 22.8 +71%EBITA margin *1 4.3% 2.9% +48%------------------- ----------- ----------- ----------Net liabilities (57.0) (55.4) -3%Order book £1.36bn £1.40bn -3%Average number of employees *2 6,753 5,766 +17% *1 2007 excludes one-off costs of STEP Change of £4.6 million (2006: £nil). *2 Full time equivalents, including agency staff. Performance in the Power and Process division was strong, reflecting the ramp-upof major contracts in the UK and higher levels of activity in North America. Asa result of the continued strength in trading during 2007 and increasedselectivity in new work taken on, the division has increased its minimum grossmargin on all new contracts to nine per cent, from eight per cent. Revenue for the period was £1,009.1 million (2006: £794.7 million), with the 27 per cent increase for the year being almost entirely organic. The UK and Americas Power and Process businesses reported strong growth in 2007. During the year, activity increased on long-term contracts to improve gas and electricity infrastructure in the UK, whilst in North America, activity levels in the power generation, cement and alternative fuels markets were particularlyhigh. In Nuclear, activity levels remained high on the major project to restart tworeactors for Bruce Power in Canada, whilst in the UK, a five-year contract wasawarded by British Energy for engineering and project management services onthree of its fleet of nuclear power plants. EBITA in 2007 increased by 71 per cent to £38.9 million (2006: £22.8 million),principally reflecting strength of end markets and greater management focus onhigher margin contracts. EBITA margin, before one-off costs of STEP Change,showed strong improvement, being up by 48 per cent at 4.3 per cent (2006: 2.9per cent). The Power and Process order book declined by three per cent to £1.36 billion asat 31 December 2007 (2006: £1.40 billion), reflecting increased selectivity inthis division during the course of 2007. Page 7 Power and Process outlook The focus for this division in 2008 remains margin improvement. Although thebusiness is operating in a strong market environment, it is being more selectivein new work taken on and revenue growth is not a priority for 2008. The STEPChange and Operational Excellence programmes are expected to improve performanceduring 2008 and beyond. In 2007, the UK businesses achieved an EBITA margin within the 5-6 per centrange targeted for the Power and Process division in 2008. The Americas businessis expected to achieve the margin target in 2008. The quality of the order book was improved during 2007, with a higher grossmargin threshold on all new contracts, as described above. This, coupled withhigher profit-take on contracts as they pass key milestones, is expected to leadto improved margin performance in 2008. The board is confident that performance will be comfortably within the revised(as at December 2007) 2008 margin target range of 5-6 per cent (original targetrange 5-7 per cent). The Power and Process division is targeting an EBITA marginof 6-7 per cent in 2010. Earth and Environmental Earth and Environmental provides specialist environmental, geotechnical,programme management and consultancy services to a broad range of clients in thepublic and private sectors. This business operates from a regional network andis characterised by a large number of small value contracts. £ million 2007 2006 change-------------------- ----------- ---------- ----------Revenue 288.4 304.4 -5%EBITA 21.2 17.7 +20%EBITA margin 7.4% 5.8% +28%-------------------- ----------- ---------- ----------Net assets 33.2 19.0 +75%Average number of employees *1 3,576 3,119 +15% *1 Full time equivalents, including agency staff. Underlying revenues before currency fluctuations were up around four per centduring the year. Increased revenues in both Canada and the US were offset byreduced US Federal activities outside North America and weakness of the USdollar. During the year, significant contracts included the preparation of a majorenvironmental impact statement covering 17 states for the US Fish and WildlifeService, a two-year dam safety geotechnical services contract from the FloodControl District of Maricopa County (US) and environmental services for clientsin the Canadian oil sands including Imperial Oil. Page 8 EBITA increased by 20 per cent to £21.2 million (2006: £17.7 million), withgrowth principally reflecting strong end markets in Canada. EBITA marginincreased to 7.4 per cent (2006: 5.8 per cent). Earth and Environmental outlook Earth and Environmental end markets are expected to remain strong, with thedivision expected to make further progress in 2008. Given the strength of margin performance in 2007, the margin target range forEarth and Environmental in 2008 was increased to 8-9 per cent in December 2007,up from the 6-8 per cent range set in December 2006. The division is targetingan EBITA margin of 9-10 per cent in 2010. Investments and other activities The Investments and other activities division includes past activities in Rail(now sold), Hong Kong (now substantially reduced), US Construction Management(all projects now completed) and a plant hire business (sold in February 2008),together with two ongoing PPP activities in Korea and the UK. It also nowincludes the Wind Developments business (formerly reported in the Power andProcess division). £ million 2007 2006 change-------------------- ----------- ---------- ----------Revenue 64.4 125.7 -49%EBITA (11.0) 8.5 nm nm: not meaningful Revenues in this division declined by 49 per cent to £64.4 million (2006: £125.7million) reflecting the lower level of activities following business disposals.2007 revenues primarily reflected the last remaining construction managementproject in the US, successfully completed in the latter part of the year. The loss of £11.0 million in 2007 stems largely from the costs of developing thegroup's Wind Developments portfolio, where a loss of £6.7 million was reported(2006: £4.3 million loss) and the result of a realignment of profit-takepolicies for the retained PPP portfolio. Investments and other activities outlook The Wind Developments business is expected to make progress in 2008, but willcontinue to incur costs of progressing development opportunities. The UK PPPproject is fully operational and AMEC will be working to optimise the value ofthis investment during 2008. AMEC is a shareholder and project manager of theIncheon Bridge project in Korea, which is scheduled to open in late 2009. The overall outcome for the division in 2008 is expected to be a small loss,assuming that the Edinbane wind development is built-out. Page 9 Performance improvement STEP Change STEP Change, a programme of change in the structure and culture of the company,was completed ahead of schedule in September 2007 and exceeded originalexpectations. Savings of £11 million were delivered in 2007, and with furtherincremental savings of at least £29 million in 2008, recurring net benefits of£40 million per annum are expected, compared with the 2006 baseline. The total cash cost of the programme in 2007 was £12 million, compared with theoriginal estimate of £18 million. Operational Excellence Following the successful completion of STEP Change, AMEC is proceeding withOperational Excellence, a 2-3 year programme to radically improve the group'soperating performance. Through Operational Excellence, AMEC intends to improve the quality of thebusiness portfolio and service delivery to customers, and to simplify andoptimise internal controls and processes. Operational Excellence will be a major contributor to AMEC delivering its targetEBITA margin of eight per cent in 2010. Target margins for 2008 and 2010 aresummarised below: Actual EBITA margin EBITA margin target range ------------- ---------------------------- 2007 2008 2010 -------------------------------------------- Natural Resources *1 9.4% 9 - 10% 10 - 11%Power and Process *1 4.3% *2 5 - 6 % 6 - 7 %Earth and Environmental *1 7.4% 8 - 9 % 9 - 10% ---------------------------------------------Group margin *3 5.1% *2 6 % 8 % *1 Profit for continuing operations, before corporate costs and netfinancing income/(costs), exceptional items, intangible amortisation and jointventure tax, but including joint venture profit before tax, as a percentage ofrevenues. *2 Before one-off costs of STEP Change. *3 EBITA margin after corporate costs. Operational Excellence is expected to incur costs of up to £10 million in 2008.Further costs, both revenue and capital expenditure, are expected in 2009. Page 10 Financial review Geographical analysis Some 60 per cent of 2007 revenues were generated outside the UK, with thegroup's largest overseas market being Canada, driven by Minerals and MetalsMining and Oil Sands. The board's expectations for 2008 reflect current sterling rates of exchangewith principal currencies, being Canadian dollars and US dollars. Administrative expenses Administrative expenses increased by £32.0 million to £203.7 million (2006:£171.7 million). During 2007, there was an increased charge for share-basedpayments, together with a reduction in sales generated by activities which havenow ceased and where overheads were minimal in both 2006 and 2007 (USConstruction Management and Oil and Gas lump-sum fabrication). After takingthese factors into account, administration costs declined to 8.9 per cent ofrevenue in 2007 from 9.4 per cent in 2006. Corporate costs, which represent the costs of operating the head office of AMECand certain regional overheads, were £36.5 million (2006: £21.4 million). Costsfor 2007 included increased year on year share-based payment charges (£6million), and one-off costs of STEP Change (£5 million). Corporate costs for2008, including share-based payments, are expected to be c.£30 million. Thisincludes some costs previously reflected within the operating divisions. Net financing income/costs The group's net cash balances have increased throughout 2007 upon the divestmentof non-core and specialist businesses, with the weekly average level of net cashbeing £435 million (1 August - 31 December 2006: £190 million). Consequently,the net financing income for the year increased by £25.4 million to £18.4million (2006: charge £7.0 million). As previously disclosed, net financing income in 2008 will benefit from theexpected increase in average net cash for the year. Taxation The group's effective tax rate in 2007 for the continuing businesses, beforeexceptional items and including tax attributable to joint venture interests, was25.4 per cent (2006: 30.0 per cent). After excluding intangible amortisation,the tax rate was 25.4 per cent (2006: 28.6 per cent). The reduction in theoverall tax rate is due to the use of overseas tax losses, and the recognitionof a deferred tax asset in respect of overseas tax losses and short term timingdifferences on provisions which are now expected to generate a current taxbenefit in future periods. Page 11 The underlying tax rate in 2008 is expected to be c.34 per cent. This wouldreduce to c.31 per cent if the group is able to make use of tax attributesbrought forward which have not been reflected within the deferred tax asset. A total net tax credit of £0.8 million (2006: credit of £7.3 million) isattributable to total exceptional income of £28.2 million (2006: charges of£102.8 million) in respect of continuing activities. There are two parts to thisnet credit. The first is the net £1.0 million tax credit on exceptional profitsfrom litigation and separation costs of £4.5 million. This arises on therecognition of a deferred tax asset in respect of short-term timing differenceson US provisions, which are expected to generate a current tax benefit in futureperiods. The second is a £0.2 million tax charge on exceptional profits of £23.7million on exiting businesses and markets. This is low due to the benefit ofcapital losses and tax exemptions on the sale of trading companies. Cash flow and current liquidity At 31 December 2007, AMEC had net cash of £733.2 million (2006: £354.9 million,excluding amounts held for sale). The group focuses on the weekly average levelof net cash throughout the year, with the increase in 2007, as referred toabove, reflecting business divestments, strength of trading and ongoing goodcash management. During 2008, the directors expect weekly average net cash to be around £600million (2007: £435 million), before the impact of the share buy back programmeand acquisitions. Around £100 million is expected to be spent on acquisitions inthe first half of 2008. Following completion of the divestment programme, the profit conversion metricfor the group has been rebased to reflect continuing operations from 1 January2007. Cash flow from operations for the continuing businesses of £140.1 millionin 2007 was 23 per cent ahead of profit before net financing income (before gainon disposals for continuing businesses, £17.7 million) of £114.3 million. Share buy backs In 2008, the group may continue the share buy-back programme, of up to £80million, on an opportunistic basis. Pensions The IAS19 pre-tax surplus of the principal UK pension schemes at the end of 2007of £248.0 million was higher than in 2006 (£105.6 million), reflectingadditional contributions made by the company, the curtailment gain on disposalsand actuarial gains in the year. During the year, the trustees reduced the schemes' level of equity investmentsfrom c.50 per cent to c.35 per cent, in favour of bonds. This change will reducethe expected investment return on the assets in the principal UK pension schemesin 2008. Page 12 Since the year-end, equity markets have fallen. The board estimates that as atJanuary 2008, this would have resulted in the pre-tax surplus of the schemesdeclining by c.£50 million under an IAS 19 valuation. Recent guidance from the Pensions Regulator regarding longevity statisticssuggests that further strengthening of mortality assumptions may be appropriate,and specifically alludes to the adoption of the 'long-cohort' rate ofimprovement as a benchmark for occupational scheme mortality going forward. Themortality experience of the AMEC schemes will be reviewed in detail at the nextactuarial valuation, due as at 1 April 2008. A move to long-cohort assumptionswould reduce the current funding surplus (pre-tax) by c.£60 million orapproximately five per cent of liabilities. Even after taking into account boththe recent fall in equity markets and the potential move to long-cohortassumptions, the schemes would remain in a strong position. The surplus has been presented net of deferred tax on the balance sheet in 2007,following a review of the basis of recoverability. Provisions Provisions held at 31 December 2007 were £199.4 million (31 December 2006:£173.8 million). The increase during 2007 reflects the net impact of the sale ofBuilt Environment businesses, offset by settlement of litigation issues.Provisons are analysed as follows: As at 31 December 2007 £ million------------------------- --------Litigation provisions (71.5)Indemnities granted to buyers/ retained obligations on disposedbusinesses (78.9)Insurance and other (49.0) -------- Total (199.4) -------- An outflow of £30-40 million is expected in each of 2008 and 2009. Furtheroutflows can be expected over the longer term. Page 13 Intangible amortisation and exceptional items Intangible amortisation relates to capitalised software and intangible assetsacquired as part of the acquisitions of NNC and Paragon in 2005. The 2007 chargeof £2.5 million is £1.1 million lower than in 2006, with the reduction being dueto the timing of the write-off of certain assets related to the acquisition ofParagon. Divestment of the group's four Built Environment businesses was successfullycompleted during the fourth quarter of 2007. This, combined with the profit ondisposal of peripheral businesses in the first half of the year, resulted in anaggregate post-tax exceptional gain of £243.3 million, slightly above theboard's expectations. During 2007, AMEC has made good progress in settling legacy disputes, wherereasonable to do so. In its 2006 accounts, AMEC noted six major contingentliabilities. The following significant progress has been made: •Settlement reached on the Jordan Magnesia Company Ltd. (Jordan), and Thelwall Viaduct (UK) disputes during the first half of 2007. Settlement was within the provisions previously made •Settlement on the San Francisco Jail case agreed, subject to documentation, and within the provisions previously made •Major issues resolved on the Florida project (US) •There have been a number of court hearings on the Courthouses (US) dispute but there remains no immediate conclusion to this long-running case •As previously indicated, the World Trade Center (US) remains a contingent liability No new significant contingent liabilities were added in 2007. Provisions currently held for future costs of litigation total £71.5 million(2006: £85.3 million). Given the progress made, the board's confidence hasincreased in the overall level of provisioning for these items. A net pre-taxexceptional release of £13.3 million has been made during the year in respect ofexceptional items arising from litigation issues. Page 14 CONSOLIDATED INCOME STATEMENT 2007 Exceptional Exceptional profits/(costs) items of exiting Before arising from businesses exceptional litigation and markets items (note 4) (note 4) Total Note £ million £ million £ million £ million Continuing operations Revenue 2 2,356.2 - - 2,356.2 Cost of sales (2,048.7) 10.2 0.5 (2,038.0) -------- ---------- --------- ---------Gross profit 307.5 10.2 0.5 318.2 Administrative (203.7) - - (203.7)expenses (Loss)/profit onbusiness disposalsand closures - (5.7) 23.2 17.5 -------- ---------- --------- ---------Profit before netfinancingincome 2 103.8 4.5 23.7 132.0 -------- ---------- --------- ---------Financial income 22.1 - - 22.1Financial expense (3.7) - - (3.7) -------- ---------- --------- ---------Net financing income 18.4 - - 18.4 Share of post-taxresults of jointventures and 1.2 - - 1.2associates -------- ---------- --------- --------- Profit before incometax 123.4 4.5 23.7 151.6 Income tax 5 (30.9) 1.0 (0.2) (30.1) -------- ---------- --------- ---------Profit for the yearfrom continuingoperations 92.5 5.5 23.5 121.5 (Loss)/profit forthe year fromdiscontinued 6 (4.7) 5.1 222.5 222.9operations -------- ---------- --------- --------- Profit for the year 87.8 10.6 246.0 344.4 ======== ========== ========= =========Attributable to:Equity holders of the company 344.3 Minority interests 0.1 --------- 344.4 =========Basic earnings pershare: 7Continuing operations 36.9p Discontinued operations 67.8p --------- 104.7p =========Diluted earnings pershare: 7Continuing operations 36.1pDiscontinued operations 66.2p --------- 102.3p ========= Dividends per share: 8 13.4p ========= Page 15 CONSOLIDATED INCOME STATEMENT 2006 Exceptional Exceptional items profits/(costs) arising from of exiting Before litigation and businesses exceptional separation and markets items costs (note 4) (note 4) Total (restated) (restated) (restated) (restated) Note £ million £ million £ million £ million Continuing operations Revenue 2 2,121.6 - - 2,121.6 Cost of sales (1,867.0) (17.6) (4.3) (1,888.9) -------- ---------- --------- ---------Gross profit/ 254.6 (17.6) (4.3) 232.7(loss) Administrative (171.7) - - (171.7)expenses Loss on businessdisposals andclosures - (39.1) (41.8) (80.9) -------- ---------- --------- ---------Profit/(loss)before netfinancing costs 2 82.9 (56.7) (46.1) (19.9) -------- ---------- --------- ---------Financial income 9.3 - - 9.3Financial expense (16.3) - - (16.3) -------- ---------- --------- ---------Net financing (7.0) - - (7.0)costs Share of post-taxresults of jointventures and (0.1) - - (0.1)associates -------- ---------- --------- --------- Profit/(loss)before 75.8 (56.7) (46.1) (27.0)income tax Income tax 5 (22.5) 4.9 2.4 (15.2) -------- ---------- --------- ---------Profit/(loss) forthe year fromcontinuing 53.3 (51.8) (43.7) (42.2)operations Profit/(loss) forthe year fromdiscontinued 6 0.5 (16.4) 277.3 261.4operations -------- ---------- --------- --------- Profit/(loss) forthe year 53.8 (68.2) 233.6 219.2 ======== ========== ========= ========= Attributable to:Equity holders ofthe company 218.1 Minority interests 1.1 --------- 219.2 =========Basic (loss)/earnings per share: 7Continuing operations (13.3)pDiscontinued operations 80.2 p --------- 66.9 p =========Diluted (loss)/earnings per share: 7Continuing operations (13.3)pDiscontinued operations 80.2 p --------- 66.9 p ========= Dividends per 8 12.2 pshare: ========= Page 16 CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE 2007 2006 Note £ million £ million Exchange movements on translation offoreign subsidiaries 32.3 (37.4) Actuarial gains on defined benefitpension schemes 86.1 2.9 Group share of actuarial gains on definedbenefit pension scheme within associate(net of tax) - 1.8 Net (loss)/gain on hedges of netinvestment in foreign subsidiaries (8.6) 16.4 Cash flow hedges:Effective portion of changes in fair value 1.8 12.5Transferred to the income statement (2.1) -Group share of changes in fair value ofcash flow hedges within joint venture entities (net of tax) 2.4 5.0 Tax in respect of items recogniseddirectly in equity (21.9) (6.5) ---------- ---------Net income/(expense) recogniseddirectly in equity 90.0 (5.3) Profit for the year 344.4 219.2 ---------- ---------Total recognised income and expensefor the year 434.4 213.9 ========== =========Attributable to:Equity holders of the company 9 434.3 211.3Minority interests 0.1 2.6 ---------- ---------Total recognised income and expensefor the year 434.4 213.9 ========== ========= Page 17 CONSOLIDATED BALANCE SHEET Note 31 December 31 December 2007 2006 £ million £ millionASSETSNon-current assetsProperty, plant and equipment 57.6 73.3Intangible assets 223.8 197.6Interests in joint ventures and associates 22.7 85.2Other investments 0.8 0.9Retirement benefit assets 161.3 105.6Deferred tax assets 58.9 16.4 ------------ ------------- Total non-current assets 525.1 479.0 ------------ -------------Current assetsInventories 6.1 47.7Trade and other receivables 529.4 806.3Derivative financialinstruments 3.1 9.0Cash and cash equivalents 734.1 375.4Assets classified as held for sale 19.0 107.1 ------------ ------------- Total current assets 1,291.7 1,345.5 ------------ ------------- Total assets 1,816.8 1,824.5 ------------ ------------- LIABILITIESCurrent liabilitiesBank loans and overdrafts (0.8) (13.6)Trade and other payables (641.5) (1,021.4)Derivative financialinstruments (5.3) (1.9)Current tax payable (59.6) (19.3)Liabilities classified asheld for sale (5.4) (69.5) ------------ ------------- Total current liabilities (712.6) (1,125.7) ------------ ------------- Non-current liabilitiesBank loans (0.1) (6.9)Retirement benefit liabilities (11.3) (13.0)Deferred tax liabilities - (10.3)Provisions (199.4) (173.8) ------------ -------------Total non-currentliabilities (210.8) (204.0) ------------ ------------- Total liabilities (923.4) (1,329.7) ------------ ------------- Net assets 2 893.4 494.8 ============ ============= EQUITYShare capital 168.7 166.8Share premium account 99.5 90.7Hedging and translation reserves 16.8 (20.5)Capital redemption reserve 17.2 17.2Retained earnings 590.4 238.9Amounts recognised in equity relating to assets and liabilities held for sale - 0.9 ------------ ------------- Total equity attributableto equity holders of parent 9 892.6 494.0 Minority interests 0.8 0.8 ------------ ------------- Total equity 893.4 494.8 ============ ============= Page 18 CONSOLIDATED CASH FLOW STATEMENT 2007 2006 Note £ million £ million Cash flow from operating activitiesProfit/(loss) before income tax fromcontinuing operations 151.6 (27.0)Profit before income tax fromdiscontinued operations 6 290.7 241.3 -------- --------- Profit before income tax 442.3 214.3Financial income (24.2) (18.5)Financial expense 4.2 28.3Share of post-tax results of jointventures and associates (6.0) (11.7)Intangible amortisation 2.5 6.2Depreciation 21.7 35.1Impairment of non-current assets - 7.1Profit on disposal of businesses (310.1) (301.8)Profit on disposal of property, plant andequipment (2.3) (1.6)Equity settled share-based payments 5.3 (2.3) -------- --------- 133.4 (44.9) Decrease in inventories 7.4 12.7Decrease in trade and other receivables 36.1 112.3(Decrease)/increase in trade and otherpayables and provisions (36.7) 21.6 -------- --------- Cash generated from operations 140.2 101.7 Interest paid (4.2) (36.8)Tax(paid)/refunds received (38.0) 9.5 -------- --------- Net cash flow from operating activities 98.0 74.4 -------- ---------Cash flow from investing activitiesAcquisition of subsidiaries, net of cashacquired (12.7) (15.0)Acquisition of joint ventures, associatesand other investments (6.0) (23.5)Purchase of property, plant and equipment (18.4) (38.2)Purchase of intangible assets (0.2) (0.6)Disposal of businesses (net of cash disposed of) 263.1 627.4Disposal of joint ventures, associatesand other investments 19.2 27.2Disposal of property, plant and equipment 9.7 26.5Interest received 22.7 19.0Dividends received from joint venturesand associates 2.0 3.2 -------- --------- Net cash flow from investing activities 279.4 626.0 -------- --------- Net cash flow before financing activities 377.4 700.4 -------- --------- Cash flow from financing activitiesRepayment of loans (4.3) (549.9)Dividends paid (39.8) (37.5)Proceeds from shares issued 10.7 1.6Acquisition of treasury shares (21.5) -Disposal of shares by trustees of the Performance Share Plan 2002 0.3 2.2 -------- --------- Net cash flow from financing activities (54.6) (583.6) -------- --------- Increase in cash and cash equivalents 322.8 116.8Cash and cash equivalents as at thebeginning of the year 10 406.4 332.7Exchange gains/(losses) on cash and cashequivalents 4.2 (12.8)Cash of former subsidiary equity accountedfrom the beginning of the year - (30.3) -------- ---------Cash and cash equivalents as at the endof the year 10 733.4 406.4 ======== ========= Page 19 Cash and cash equivalents consist of:Cash at bank and in hand 720.4 336.2Short-term investments 13.7 39.2 --------- --------- 734.1 375.4Overdrafts (0.7) (1.2) --------- --------- 733.4 374.2Cash and cash equivalents (including overdrafts)classified as held for sale - 32.2 --------- --------- Cash and cash equivalents 10 733.4 406.4 ========= ========= NOTES 1. BASIS OF PREPARATION In accordance with EU law (IAS Regulation EC 1606/2002), the preliminary resultshave been prepared in accordance with International Financial ReportingStandards ("IFRS") adopted for use in the EU as at 31 December 2007 ("adoptedIFRS"), International Financial Reporting Interpretations Committee ("IFRIC")interpretations and those parts of the Companies Act 1985 applicable tocompanies reporting under IFRS. IFRS 7 "Financial instruments: disclosure" was adopted during the year. As thestandard is concerned only with disclosure, its adoption had no impact on eitherthe balance sheet or the income statement. During 2006 IFRIC 12 on service concession arrangements was issued. Thisinterpretation is effective from 1 January 2008, but has yet to be adopted foruse in the EU. In view of this, the directors consider that it remainsappropriate to apply the approach set out in Application Note F of the UKFinancial Reporting Standard 5 "Reporting the substance of transactions" indetermining the accounting model to be applied to AMEC's PPP activities. Thisinvolves applying a "risks and rewards" test to determine whether a non-currentasset or finance debtor model should be followed. The directors do not expectthis accounting policy to be significantly different to that under IFRIC 12. During 2007 IFRIC 14 on defined benefit pension scheme assets was issued. Thisinterpretation is effective from 1 January 2008, but has yet to be adopted foruse in the EU. In view of this it has not been applied by the group in theconsolidated accounts. On adoption this is not expected to have an impact on thegroup's consolidated accounts as, following a review of the basis ofrecoverability, the surplus has been presented net of deferred tax on thebalance sheet in 2007. During 2006 IFRIC 11 on group and treasury share transactions was issued. Thisinterpretation is effective for the group's 2008 accounts and is not expected tohave a material impact on the group's consolidated accounts. During 2006 IFRS 8 on segment reporting was issued and is effective from 1January 2009. IFRS 8 will require disclosure of segment information based oninternal management information. The financial information for the years ended 31 December 2007 and 2006 set outabove does not constitute statutory accounts within the meaning of section 240of the Companies Act 1985 ("the Act"). Statutory accounts for the year ended 31December 2006, which were prepared under IFRS, have been delivered to theRegistrar of Companies. The accounts for the year ended 31 December 2007 will bedelivered to the Registrar of Companies following the Annual General Meeting.The company's auditors, KPMG Audit Plc, have reported on the 2007 and 2006accounts under section 235(1) of the Act. These reports were not qualifiedwithin the meaning of section 235(2) of the Act and did not contain statementsmade under section 237(2) and section 237(3) of the Act. The annual report and accounts for the year ended 31 December 2007 will beposted to shareholders on 11 April 2008. The results for 2007 were approved by the board of directors on 11 March 2008and are audited. The Annual General Meeting will take place on 14 May 2008. The final dividend will be payable on 1 July 2008 to shareholders on theregister at the close of business on 23 May 2008. Interim and preliminary announcements notified to the London Stock Exchange areavailable on the internet at www.amec.com. Page 20 2. ANALYSIS OF REVENUE, PROFIT/(LOSS) BEFORE FINANCING INCOME/(COSTS) AND NETASSETS/(LIABILITIES) The segmental review on pages 4 to 10 is based on the reported results beforeintangible amortisation and exceptional items but including joint venture profitbefore tax. The results as presented in the segmental review are reconciled tothose presented in the following tables on pages 23 to 24. Profit/(loss)before net Revenue financing income/(costs) 2007 2006 2007 2006 £ million £ million £ million £ millionClass of business:Natural Resources 1,014.8 920.9 93.7 48.9Power and Process 1,009.1 794.7 48.4 3.0Earth and Environmental 288.4 304.4 20.9 17.2Investments and otheractivities 64.4 125.7 5.5 (67.6) -------- -------- ------- -------- 2,376.7 2,145.7 168.5 1.5Internal revenue (20.5) (24.1) - -Corporate costs - - (36.5) (21.4) -------- -------- ------- -------- 2,356.2 2,121.6 132.0 (19.9) ======== ======== ======= ========Geographical origin:United Kingdom 950.5 844.5 70.0 28.4Rest of Europe 88.6 55.4 6.4 7.6Americas 1,180.9 1,018.6 89.3 (33.4)Rest of the world 136.2 203.1 2.8 (1.1) -------- -------- ------- -------- 2,356.2 2,121.6 168.5 1.5Corporate costs - - (36.5) (21.4) -------- -------- ------- -------- 2,356.2 2,121.6 132.0 (19.9) ======== ======== ======= ======== Net assets/(liabilities) 2007 2006 £ million £ million Class of business:Natural Resources 29.8 74.0Power and Process (51.5) (50.2)Earth and Environmental 34.5 19.6Investments and otheractivities (207.3) (130.5)Discontinued operations - (122.7) ------- -------- (194.5) (209.8)Goodwill 215.4 187.9Interests in joint ventures and associates 22.7 85.2Net cash 733.2 354.9Unallocated net assets 103.0 39.0Assets and liabilities classified as held for sale 13.6 37.6 ------- -------- 893.4 494.8 ======= ========Geographical origin:United Kingdom (124.2) (69.9)Rest of Europe (56.1) (58.9)Americas 195.9 183.6Rest of the world 5.3 46.0Discontinued operations - (122.7) ------- -------- 20.9 (21.9)Interests in joint ventures and associates 22.7 85.2Net cash 733.2 354.9Unallocated net assets 103.0 39.0Assets and liabilities classified as held for sale 13.6 37.6 ------- -------- 893.4 494.8 ======= ======== Page 21 3. PROFIT AND NET ASSETS RECONCILIATIONS RECONCILIATION OF ADJUSTED PROFIT BEFORE TAX Year ended 31 December 2007 Pre-tax Tax on results results of Adjusted of joint joint profit Excep- Intangible ventures ventures Profit before tional amorti- and and before tax items sation associates associates tax £ million £ million £ million £ million £ million £ million NaturalResources 95.5 - (0.6) (1.2) - 93.7Power andProcess 38.9 11.5 (1.5) (0.5) - 48.4Earth andEnviron-mental 21.2 - (0.3) - - 20.9Investmentsand other activities (11.0) 16.7 (0.1) (0.1) - 5.5 ------- -------- -------- -------- -------- ------- 144.6 28.2 (2.5) (1.8) - 168.5 Corporate (36.5) - - - - (36.5)costs ------- -------- -------- -------- -------- ------- Profit/(loss)before netfinancingincome 108.1 28.2 (2.5) (1.8) - 132.0 Net financingincome 18.4 - - - - 18.4 Share ofpost-taxresultsof jointventuresandassociates - - - 1.8 (0.6) 1.2 ------- -------- -------- -------- -------- ------- 126.5 28.2 (2.5) - (0.6) 151.6 ======= ======== ======== ======== ======== ======= Year ended 31 December 2006 Pre-tax Tax on results results of Adjusted of joint joint profit Excep- Intangible ventures ventures Profit before tional amorti- and and before tax items sation associates associates tax £ million £ million £ million £ million £ million £ million NaturalResources 59.1 (7.8) (1.8) (0.6) - 48.9Power andProcess 22.8 (17.6) (1.0) (1.2) - 3.0Earth andEnvironmental 17.7 - (0.5) - - 17.2Investmentsand otheractivities 8.5 (77.4) (0.3) 1.6 - (67.6) ------- -------- -------- -------- -------- ------- 108.1 (102.8) (3.6) (0.2) - 1.5 Corporate (21.4) - - - - (21.4)costs ------- -------- -------- -------- -------- ------- Profit/(loss)before netfinancing 86.7 (102.8) (3.6) (0.2) - (19.9)costs Net financingcosts (7.0) - - - - (7.0) Share ofpost-taxresults ofjointventures andassociates - - - 0.2 (0.3) (0.1) ------- -------- -------- -------- -------- ------- 79.7 (102.8) (3.6) - (0.3) (27.0) ======= ======== ======== ======== ======== ======= Page 22 3. PROFIT AND NET ASSETS RECONCILIATIONS continued RECONCILIATION OF ADJUSTED NET ASSETS 31 December 2007 Interests in Adjusted joint net assets/ ventures and Intangible Net assets/ (liabilities) associates assets (liabilities) £ million £ million £ million £ million Natural Resources 28.8 0.2 0.8 29.8Power and Process (57.0) (0.6) 6.1 (51.5)Earth andEnvironmental 33.2 (0.2) 1.5 34.5Investments andother activities (185.2) (22.1) - (207.3) -------- --------- -------- -------- (180.2) (22.7) 8.4 (194.5) Goodwill 215.4 - - 215.4 Intangible assets 8.4 - (8.4) - Interests in jointventures andassociates - 22.7 - 22.7 Net cash 733.2 - - 733.2 Unallocated netassets 103.0 - - 103.0 Assets andliabilitiesclassified as heldfor sale 13.6 - - 13.6 -------- --------- -------- -------- 893.4 - - 893.4 ======== ========= ======== ======== 31 December 2006 Interests in Adjusted joint net assets/ ventures and Intangible Net assets/ (liabilities) associates assets (liabilities) £ million £ million £ million £ million Natural Resources 71.3 0.6 2.1 74.0Power and Process (55.4) (1.1) 6.3 (50.2)Earth andEnvironmental 19.0 (0.2) 0.8 19.6Investments andother activities (109.2) (21.8) 0.5 (130.5)Discontinuedoperations (60.0) (62.7) - (122.7) -------- --------- -------- -------- (134.3) (85.2) 9.7 (209.8) Goodwill 187.9 - - 187.9 Intangible assets 9.7 - (9.7) - Interests in jointventures andassociates - 85.2 - 85.2 Net cash 354.9 - - 354.9 Unallocated netassets 39.0 - - 39.0 Assets andliabilitiesclassified as heldfor sale 37.6 - - 37.6 -------- --------- -------- -------- 494.8 - - 494.8 ======== ========= ======== ======== Page 23 4. EXCEPTIONAL ITEMS 2007 2006 £ million £ million Natural Resources - (7.8)Power and Process 11.5 (17.6)Investments and other activities 16.7 (77.4) -------- --------- Exceptional items of continuing operations 28.2 (102.8)Taxation on exceptional items of continuing operations 0.8 7.3Exceptional items of discontinued operations (posttax) 227.6 260.9 -------- --------- Post-tax exceptional profits 256.6 165.4 ======== ========= Exceptional items are further analysed as follows: 2007 2006 Other Other Gain on exceptional Gain on exceptional disposals items Total disposals items Total £ million £ million £ million £ million £ million £ million Continuingoperations 17.7 10.5 28.2 - (102.8) (102.8)Discontinuedoperations 292.4 2.8 295.2 301.8 (67.1) 234.7 -------- -------- ------- -------- -------- -------Profitbefore 310.1 13.3 323.4 301.8 (169.9) 131.9taxTax (66.8) - (66.8) 9.7 23.8 33.5 -------- -------- ------- -------- -------- -------Profit aftertax 243.3 13.3 256.6 311.5 (146.1) 165.4 ======== ======== ======= ======== ======== ======= The gain in disposals in the year reflects the profit on disposal of the Built Environment businesses and other peripheral businesses. Other exceptional items comprise provision releases of £30.9 million in relation to the settlement ofseveral outstanding matters on projects including Jormag, Thelwall and several other construction related projects. In addition provisions were increased by £17.6 million to reflect developments on three US and one UK construction projects. 5. INCOME TAX Income tax on the profit from continuing operations before exceptional items andintangible amortisation for the year is based on an effective rate of 25.4%(2006: 28.6%). 6. PROFIT FOR THE YEAR FROM DISCONTINUED OPERATIONS The Built Environment businesses have been reclassified as discontinuedoperations in 2007. Other discontinued activities in 2007 include pipelinesconstruction. In 2006, AMEC SPIE and pipelines construction were treated asdiscontinued operations. In accordance with IFRS 5, the post tax results ofdiscontinued operations are disclosed separately in the consolidated incomestatement, with the 2006 consolidated income statement being restated for thesame presentation. The results of the discontinued operations were as follows: 2007 2006 £ million £ million Revenue 710.7 2,431.6Cost of sales and net operating expenses (715.2) (2,422.4) -------- --------- (4.5) 9.2Intangible amortisation - (2.6) -------- --------- (Loss)/profit before exceptional items and income tax (4.5) 6.6Attributable tax (0.2) (6.1) -------- --------- (4.7) 0.5Exceptional items 2.8 (67.1)Attributable tax on exceptional items (0.9) 16.5Profit on disposal 292.4 301.8Attributable tax on profit on disposal (66.7) 9.7 -------- --------- Profit for the year from discontinued operations 222.9 261.4 ======== ========= Page 24 7. EARNINGS PER SHARE Total basic earnings per share is shown on the face of the income statement. Thecalculation of the average number of shares in issue has been made havingdeducted the shares held by the trustees of the Performance Share Plan 2002,those held by the qualifying employee share ownership trust and those held intreasury by the company. 2007 Weighted average Earnings shares per Earnings number share £ million million pence Basic earnings from continuing operations 121.4 328.7 36.9 Share options - 2.5 (0.2)Employee share and incentive schemes - 5.3 (0.6) -------- -------- --------- Diluted earnings from continuing operations 121.4 336.5 36.1 ======== ======== ========= Basic earnings from discontinued operations 222.9 328.7 67.8 Share options - 2.5 (0.5)Employee share and incentive schemes - 5.3 (1.1) -------- -------- --------- Diluted earnings from discontinued operations 222.9 336.5 66.2 ======== ======== ========= 2006 Weighted average (Loss)/ (Loss)/ shares earnings per earnings number share £ million million pence Basic and diluted loss from continuingoperations (43.3) 325.9 (13.3) ======== ======== =========Basic and diluted earnings from discontinuedoperations 261.4 325.9 80.2 ======== ======== ========= Loss per share from continuing operations for 2006 was calculated on a loss of£43.3 million, as a result there are no dilutive ordinary shares. Basic and diluted earnings/(losses) from continuing operations are calculated asset out below: 2007 2006 £ million £ million Profit/(loss) for the year from continuing operations 121.5 (42.2)Profit attributable to minority interests (0.1) (1.1) -------- ---------Basic and diluted profit/(loss) from continuingoperations 121.4 (43.3) ======== ========= Page 25 7. EARNINGS PER SHARE continued In order to appreciate the effects of exceptional items and intangibleamortisation on the reported performance, additional calculations of earnings/(loss) per share from continuing operations are presented. 2007 Weighted average Earnings shares per Earnings number share £ million million pence Basic earnings from continuing operations 121.4 328.7 36.9 Exceptional items (29.0) - (8.8) Intangible amortisation (net of tax) 1.9 - 0.6 -------- -------- --------- Basic earnings from continuing operations beforeexceptional items and intangible amortisation 94.3 328.7 28.7 Share options - 2.5 (0.2) Employee share and incentive schemes - 5.3 (0.5) -------- -------- ---------Diluted earnings from continuing operationsbefore exceptional items and intangibleamortisation 94.3 336.5 28.0 ======== ======== ========= 2006 Weighted (Loss) average /earnings (Loss) shares per /earnings number share £ million million pence Basic loss from continuing operations (43.3) 325.9 (13.3) Exceptional items 95.5 - 29.3 Intangible amortisation 3.6 - 1.1 -------- -------- ---------Basic earnings from continuing operations beforeexceptional items and intangible amortisation 55.8 325.9 17.1Share options - 4.1 (0.2) Employee share and incentive schemes - 6.1 (0.3) -------- -------- ---------Diluted earnings from continuing operationsbefore exceptional items and intangibleamortisation 55.8 336.1 16.6 ======== ======== ========= 8. DIVIDENDS Dividends 2007 2006 Pence £ million Pence £ million Dividends paidInterim dividend in respect of2006 (2006: interim dividend inrespect of 2005) 4.2 13.6 4.0 13.0 Final dividend in respect of2006 (2006: final dividend inrespect of 2005) 8.0 26.2 7.5 24.5 ------- -------- -------- -------- 12.2 39.8 11.5 37.5 ======= ======== ======== ======== Page 26 8. DIVIDENDS (continued) 2007 2006 Pence £ million Pence £ million Dividends charged to reservesFinal dividend in respect of 2006(2006: final dividend in respect of 2005) 8.0 26.2 7.5 24.5 Interim dividend in respect of 2007(2006: interim dividend in respect of 2006) 4.6 15.1 4.2 13.8 -------- -------- -------- -------- 12.6 41.3 11.7 38.3 ======== ======== ======== ======== After the balance sheet date the directors proposed a final dividend in respectof the year ended 31 December 2007 of 8.8 pence per share payable on 1 July 2008to equity holders on the register at the close of business on 23 May 2008. Thisdividend has not been provided for and there are no income tax consequences forthe company. 9. RECONCILIATION OF MOVEMENTS IN EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THEPARENT 2007 2006 £ million £ million Total recognised income and expense 434.3 211.3Dividends (41.3) (38.3)Shares issued 10.7 1.6Equity settled share-based payments 5.3 (2.3)Disposal of shares by trustees of the PerformanceShare plan 2002 0.3 2.2Acquisition of treasury shares (21.5) -Recognised in profit on disposal 10.8 (3.1) --------- --------- Net increase in total equity 398.6 171.4 Equity as at beginning of the year 494.0 322.6 --------- --------- Total equity attributable to equity holders of theparent as at end of the year 892.6 494.0 ========= ========= The equity attributable to minority interests is £0.8 million (2006: £0.8 million) 10. ANALYSIS OF NET CASH 2007 2006 £ million £ million Cash at bank and in hand 720.4 336.2Short-term investments 13.7 39.2 --------- ---------Cash and cash equivalents disclosed on the balancesheet 734.1 375.4Overdrafts (0.7) (1.2) --------- --------- 733.4 374.2Cash and cash equivalents (including overdrafts) classified as held for sale - 32.2 --------- --------- Total cash and cash equivalents 733.4 406.4Current debt (0.1) (12.4)Non-current debt (0.1) (6.9) --------- --------- Net cash as at the end of the year 733.2 387.1 ========= ========= Net cash is analysed between the amount disclosed in the balance sheet andamounts classified as held for sale as follows: 2007 2006 £ million £ million Net cash disclosed on the balance sheet 733.2 354.9Net cash classified as held for sale - 32.2 --------- --------- Total net cash as at the end of the year 733.2 387.1 ========= ========= END This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
AMFW.L