Amec Backs Modest Revenue Growth View, Says Financial Position Strong; Shares Up

(RTTNews) - Shares of Amec Plc (AMEC.L) gained around 3 percent in the morning trading in London after the engineering and project management company on Friday said its fiscal 2014 outlook of modest underlying revenue growth remains unchanged and the financial position of the group remains strong. Separately, the company announced that two new board directors would join after the completion of Foster Wheeler AG (FWLT) acquisition.

The company on August 7 had reported underlying revenue growth, which excludes the impact of acquisitions, disposals, and currency fluctuations, of 4% and stable margins in its first half.

In its interim management statement, the company now said its trading since then has been in line with expectations.

AMEC continues to see less greenfield activity in some of its key upstream oil and gas markets, which is partially offsetting the strong growth from Clean Energy and Middle Eastern Oil & Gas.

For fiscal 2014, the company still expects to see modest underlying revenue for its existing operations, led by ongoing strength in the Clean Energy market and Middle Eastern Oil and Gas.

As said earlier, 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. The company further said that its foreign exchange rates continue to be less favourable than 2013, and this would translate into a year on year impact on revenues of about 250 million pounds, and for trading profit of about 25 million pounds for the full year. Separately, AMEC announced that Kent Masters and Stephanie Newby have agreed to join its board as non-executive directors after completion of the offer for Foster Wheeler.

It was on February 13 that AMEC announced it had entered into a definitive agreement to acquire Foster Wheeler. The terms of the acquisition were originally announced on January 13, with Foster Wheeler shareholders receiving 0.8998 new AMEC securities and $16.00 in cash, together representing $32 for each Foster Wheeler share. The possible offer equated to a value of approximately $3.2 billion or 1.9 billion pounds.

Masters is currently President and Chief Executive Officer of Foster Wheeler. He has entered into an agreement with AMEC governing the termination of his appointment as Chief Executive of Foster Wheeler, the terms of which are conditional on completion of the offer. He will join the AMEC board immediately following the termination of his employment with Foster Wheeler, which is expected to be towards the end of the fourth quarter of 2014.

Newby is the Chief Executive Officer of Crimson Hexagon, a provider of social media and data analytic services. Newby has been a member of the Foster Wheeler board since 2004.

In London, Amec shares were gaining 33 pence or 3.16 percent, and trading at 1,078 pence.