AMEC (AMEC.L, Market Capitalisation: £3.50bn, FTSE 250, 1193p and 2.5% of JIC Portfolio); Early readers of JohnsInvestmentChronicle may remember that for a brief time in early 2012 I was a holder of AMEC, selling in April ‘12 for a near 10% profit. It has again come up on my “screens” and I think looks very attractive. On consensus forecasts it is valued at 13.2x December 2014 earnings and has a prospective 2014 dividend yield of 3.9%. December 2015 forecasts leave it on a PE Ratio of 10.9x for 10% earnings growth and a yield of 4.4%.
The following description of its activities are taken from its website: www.amec.com
• AMEC is one of the world’s leading engineering, project management and consultancy companies
• Our goal is to deliver profitable, safe and sustainable projects and services for our customers in the oil and gas, mining, clean energy, environment and infrastructure markets, including sectors that play a vital role in the global and national economies and in people’s everyday lives
• We design, deliver and maintain strategic assets for our customers, offering services which extend from environmental and front end engineering design before the start of a project to decommissioning at the end of an asset’s life
• Our customers, in both the private and public sector, are among the world’s biggest and best in their fields - BP, Shell, EDF, National Grid and U.S. Navy to name just a few
• We are truly international, with major operations centres based in the UK and Americas and offices and projects in around 40 countries worldwide. We work in diverse and often challenging environments, from sub-zero temperatures in the north of Canada to the sweltering heat of the Persian Gulf
• We employ over 29,000 people – ranging from scientists and environmental consultants to engineers and project managers, dedicated professionals who take pride in their work. The AMEC Academy helps us to attract, develop and retain the best talent
Results for the 31st December 2013, released on 13th February, showed revenue slightly down year-on-year, adjusted earnings per share up by 11% and operating cash flow up 9% at £341m, helped by a 0.4% percentage point improvement in margins to 8.6%. The dividend was increased by 15% to 42.0p per share and the order book stood at £4.1bn, up 13% on the prior year. The Chief Executive, Samir Brikho, painted an optimistic picture…
