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Strong pound hits Amec profits
ENGINEERING and project management firm Amec reported a 30 per cent drop in first-half pre tax profit, as a strong pound overshadowed an increase in orders.
The company, which has its European engineering headquarters in Darlington, as well as offices on Tyneside, said pre tax profit fell to £83m for the six months ended June 30 from £118m a year earlier.
Chief Executive Samir Brikho said, "We now expect to see modest underlying revenue growth in 2014 for our existing operations.
"As discussed previously, the mix of business will result in a slight reduction in group margins compared to last year. As in 2013, profits and cash flow generation will be second-half weighted."
Previously, the company said it expected to see good underlying revenue growth for its existing operations, with ongoing strength in the oil and gas and clean energy markets.
Amec announced its interim dividend per share was up 10 per cent, to 14.8p pence
In February, Amec agreed to a £2bn deal to buy US company Foster Wheeler, which has offices in Middlesbrough and employs more than 13,000 workers in 30 countries, in a bid to win more contracts in oil and gas markets.
Foster Wheeler held a general meeting on July 10, where its shareholders approved the amendments to its articles of association necessary for the transaction. IT is expected that an Amec shareholder meeting will be called in order to approve the transaction and the tender offer to Foster Wheeler shareholders will be launched.
The acquisition of Foster Wheeler is expected to complete early in the fourth quarter.
Mr Brikho added: "The acquisition of Foster Wheeler continues to make good progress, with integration planning well underway and completion now expected early in the fourth quarter. We believe the combination of Amec and Foster Wheeler is a compelling one, for our shareholders, our customers and our employees.
"A 10 per cent increase in the interim dividend signals our belief in the underlying strength of Amec."
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