AMEC Drops Despite 37% Revenue Growth

LONDON -- AMEC (LSE: AMEC.L  ) -- the global supplier of consultancy, engineering, and project-management services -- is currently down 6.4% despite releasing strong half-year results this morning. Revenue was up 37%, at 2.026 billion pounds, with pre-tax profit up 25%, at 126 million pounds.

Although underlying revenue growth in the second half of 2012 is expected to be significantly lower than the first, AMEC remains set to deliver good underlying revenue growth for the full year.

The group's order book currently stands at 3.7 billion pounds, almost 9% higher than this time last year, and the firm says demand for its services continues to be strong, despite ongoing economic uncertainty. The board's confidence in the longer term was demonstrated by a 15% increase to the interim dividend, which was raised to 11.7 pence per share.

Chief Executive Samir Brikho said:

AMEC has had an excellent start to the year, with revenue growth boosted by phasing of project execution and procurement in our oil and gas and mining businesses in particular. This flowed into EPS, which was up 25 per cent at 36.1 pence, and operating cash flow -- where we also achieved a good performance.

The order book has been maintained at record levels. We see continued demand for our services, and this has not been significantly impacted by the ongoing economic uncertainty. Second-half revenues are anticipated to be maintained at broadly the same level as the first half, leaving us on track to deliver double-digit underlying revenue growth for the full-year. We expect to continue to deliver good growth in 2013.

Even with this morning's fall, AMEC remains more than 16% up year to date, and its record of growth suggests the upward trend should continue. This morning's fall might, therefore, be a chance to buy on slight weakness.

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Jon Wallis doesn't own shares in AMEC. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.


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