Services and engineering solutions provider AMEC has reported a 30% increase in turnover to nearly £4bn (£3bn) in its final year results, and a 25% growth in pre-tax profit to almost £100m (£79m).

The support services business was the main contributor to the total operating profit and SPIE, the France based engineering and construction company in which AMEC owns 46%, increased its operating profit by 20% to £18.5m (£15.1m). The company also announced its intention to buy the remaining 54% in SPIE in 2002.

Chairman Sydney Gillibrand CBE, said: “In addition to achieving excellent results, 2000 was also a year of intensive corporate activity for AMEC, with the acquisition and successful integration of AGRA and the strengthening of our partnership with SPIE. It was also a very good year in the UK, where we further developed our client relationships. The business is set on a very solid footing for the future.”

Peter Mason, chief executive, said: “We remain focused on our task of generating value by continuing to expand AMEC’s base of recurring revenues gained from higher value services and projects for long-term clients. We see opportunities for good growth from both service and project activities, continued reliable performance from property development and the prospect of achieving yet greater value from our investment in SPIE and Public Private Partnerships (PPP).”

Finance director Stuart Siddall, chairman Sydney Gillibrand CBE and chief executive officer Peter Mason.

In operations support services the margins fell to 4.4% (4.7%). Mason said this was due to the performance of the company’s UK rail maintenance business. ”This activity has been developed over many years in response to the demand for outsourced operation, maintenance and renewal services and this growing business sector is marked by multi-year contracts and delivers predictable, low risk, operating margins,” he added.

The construction management margin was also down from 1.1% to 0.4%. “This year’s losses, whilst not large in group terms, are nevertheless quite unacceptable. We continue with the strategy set out 12 months ago, which includes strict controls that will move the business away from bidding guaranteed price projects, with low margins, to its historic focus on a more select number of projects, managed primarily on a fee basis. The business also has the opportunity to work closely with our new North American operations,” said Mason.

In the property development sector, AMEC trebled its turnover to £185m (£61m) and increased it slightly on PPP projects to £15.8m (£15.4m). The company said it will continue to invest about £5m a year on bidding for new projects since it believes this business will bring long term benefits.

Commenting on the company’s performance Mason said: “In 2000, we strengthened our focus on delivering shareholder value by continuing to build recurring revenues in both our growing Client Support Services activity and Capital Projects. The positive results of this can be seen from our reporting another year of substantial profit growth, with pre-tax profits rising 25% to £98.9m. A substantially expanded Client Support Services activity was the main contributor to AMEC’s total operating profit and SPIE, once again, made an excellent contribution.

www.amec.com

Jessica Jarlvi