12th Nov 2009 07:00
AMEC plc INTERIM MANAGEMENT STATEMENT
Chief Executive Samir Brikho said:
"AMEC remains on track to deliver another year of improved performance in 2009 despite the ongoing challenging external environment.
"We expect to deliver a margin approaching 8 per cent this year and remain confident that with the benefits of our Operational Excellence programme, we will achieve our margin target of 8.5 per cent in 2010.
"We are delighted that the GRD acquisition has been approved by shareholders. GRD will enable AMEC to enhance its Natural Resources business in Australia and South America, and expand into new regions in Africa and further into Brazil."
Conference call
A telephone conference call for analysts and investors will be held at 9.30am today.
AMEC will present "Vision 2015" at a capital markets event at 10.30am on Friday, 4 December 2009. The event will be webcast live and may be accessed from our website at amec.com.
AMEC expects to announce preliminary results for the year ending 31 December 2009 on Thursday, 4 March 2010.
Forward looking statements
Any forward looking statements made in this document represent management's best judgement 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 12 NOVEMBER 2009
Trading remains in line with expectations, with the group on track to deliver another year of improved performance despite the ongoing challenging external environment.
The group expects to achieve an EBITA margin of approaching 8 per cent in 2009 and remains firmly on track to deliver its margin target of 8.5 per cent in 2010. This improvement in performance reflects the group's investment in the Operational Excellence programme, which is strengthening AMEC's competitive position and internal efficiency.
Through Operational Excellence, investment in developing relationships with key customers has resulted in significant new contract awards during 2009. As a result, the group order book remains strong, standing at £3.0 billion at the end of October 2009 (October 2008: £2.5 billion; June 2009: £3.2 billion), with revenue fully covered for 2009. The order book is conservatively stated, and the group has a rich and diverse range of attractive prospects across the business.
Outlook
Performance for 2009 is expected to remain in line with expectations.
The acquisition of GRD is expected to complete on 30 November 2009. AMEC expects to make further selective acquisitions, with the focus being on improving AMEC's competitive position through investment in people, capabilities, and geographic footprint.
Segmental performance
Natural Resources
Natural Resources continues to deliver record performance despite a challenging external environment.
The Natural Resources order book remains strong, standing at £1.51 billion at of the end of October (October 2008: £1.35 billion; 30 June 2009: £1.73 billion). The pipeline of future work in this division remains good and provides confidence going forwards.
The average number of employees in Natural Resources for the period January - October 2009 was 9,600, being in-line with the average for the first half of the year (January - October 2008: 10,800; January - June 2009: 9,608).
Natural Resources expects the first half/second half split of revenue in 2009 before the acquisition of GRD to follow a similar pattern to the previous year.
Power and Process
Levels of activity in this division continue to reflect the change of management focus towards the provision of lower-risk services with higher value added. Older contracts that do not meet these criteria continue to progress to their completion dates as expected. Trading conditions in Power and Process end markets remain challenging, with UK industrial markets showing further weakness in the second half as customers defer capital spending.
The Power and Process order book at the end of October was £1.16 billion (October 2008: £0.90 billion; 30 June 2009: £1.27 billion) with the quality improving as the division continues its change of focus towards nuclear and clean energy markets.
The average number of employees in Power and Process for the period January - October 2009 was 7,100 (January - October 2008: 7,978; January - June 2009: 7,413), with lower headcount reflecting changes of mix in the business.
Due to the expected winding down of older contracts and further weakness in UK industrial markets, Power and Process revenues in the second half of 2009 are expected to be broadly in line with the first six months of the year.
Earth and Environmental
Earth and Environmental continues to perform well despite the challenging external environment and a slower ramping up of government/stimulus spending than initially expected.
The Earth and Environmental order book at the end of October was £0.27 billion (October 2008: £0.25 billion; 30 June 2009: £0.22 billion).
The average number of employees in Earth and Environmental for the period January - October 2009 was 4,300 (January - October 2008: 3,900; January - June 2009: 4,223), with the year-on-year increase reflecting acquisitions, particularly Geomatrix acquired in June 2008.
Earth and Environmental expects to see the normal underlying seasonal improvement in performance in the second half of 2009, though growth will be tempered by weakness in certain end markets. Spending associated with government/stimulus packages in the US and Canada is now beginning to increase, but is expected to have more impact on 2010 than 2009 trading.
Financial position and net cash
The group remains in an exceptionally strong financial position. Net cash at the end of October 2009 was c.£690 million as compared with £699 million at 30 June 2009 and £765 million at 31 December 2008.
Average net cash for 2009 is expected to be c.£700 million before the impact of GRD and any further acquisitions.
Enquiries to:
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AMEC plc: |
+ 44 (0)20 7539 5800 |
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Samir Brikho, Chief Executive |
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Ian McHoul, Chief Financial Officer |
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Sue Scholes, Director of Communications |
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Neil Jamieson, Director of Investor Relations |
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Media: |
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Brunswick Group LLP - Mike Harrison |
+ 44 (0)20 7404 5959 |
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Giles Croot |
Notes to Editors:
AMEC plc
AMEC (LSE: AMEC) is a focused supplier of high-value consultancy, engineering, and project management services to the world's energy, power and process industries. With annual revenues of over £2.6 billion, AMEC designs, delivers and maintains strategic and complex assets for its customers. AMEC's Natural Resources, Power and Process and Earth and Environmental businesses employ over 21,000 people in more than 30 countries globally.
www.amec.com
ENDS
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