Babcock helps pave the way for AMEC improvement
15 Jan 2000
A series of disposals and acquisitions helped UKcontractor AMECto increase its profits by more than a quarter in 1997, and could also attract a clutch of high-profile projects. In the Process and Energy (P&E) division, results were 'significantly better', but 'substantial scope for improvement' remains.
The group posted a profit before exceptional items of £47.5 million, on turnover holding steady at £2.78 billion. A major boost came from the sale of a 20 per cent stake in Egypt Gas, while the incorporation of a 42 per cent stake in French contractor Spie Batignolles led to a £7.5 million first-time contribution. 'The outlook for AMECis more positive today than it has been for some time,' commented chief executive Peter Mason, returning to the company after an illness.
Operating profits at P&E were up from £1.1 million to £6.1 million. The company is instituting a policy of 'rebalancing' Process and Energy away from large-scale, but unreliable, fabrication work, and towards engineering and service work, to 'improve the quality and security of future earnings.'
The acquisition during the year of Babcock International process division has brought several projects with it, including a £36 million petrochemical complex in China. 'The Babcock name has amazing power in China,' noted P&E director Roddy Grant. However, recent turmoil has curtailed projects in Indonesia, he added.
