AMEC results divide analysts
Oil and gas consultant AMEC (AMEC) on Thursday confirmed it was on track to achieve its earnings-per-share target of greater than 100p ahead of 2015 as it unveiled its 2012 full-year results.
Still, a slightly more disappointing outlook than expected sent the shares down almost 7%.
Revenues jumped 28% year-on-year to £4.16 billion, while EBITA saw an 11% increase to £331 million.
While there was no renewal of the firm's £400 million share buyback, announced and completed in 2012, there was a decent 20% rise in the dividend to 36.5p. AMEC added that it expected to maintain a progressive policy with dividend cover in the range of between two and 2.5 times.
Looking ahead, AMEC expected low- to mid-single-digit revenue growth for the group in 2013 on an underlying basis, excluding procurement. "A strong conventional oil and gas performance across the board and more modest growth in the clean energy and environment and infrastructure markets in the Americas are expected to offset reduced oil-sands revenue and softening demand in the mining market, and in Australia more generally," it said.
It added that the full-year impact of acquisitions made in 2012 would further boost revenue growth, but stressed procurement activity in 2013 would be £200 million lower than in 2012. As a result, group margins were expected to improve "gradually" at the headline level.
Staurt Joyner, analyst at Investec, maintained his 'buy' recommendation on the stock: "Overall the results and outlook are solid and, after Saipem's recent profit warning, we are not complaining!" he commented, pointing out that the shares were not expensive.
However, he cautioned: "Equally there is not currently material upside leverage either - contract wins don't move the needle."
Andrew Whittock at Liberum Capital issued a 'hold' recommendation, saying: "Margin guidance looks disappointing so forecasts will come back a little. This, and the apparent halt of the buyback programme, could be unhelpful but we expect to retain our neutral view on the shares."