AMEC plc - General - UK, Chief Executive Unveils New Strategy for AMEC

Date: 13 Dec 2006

New strategy and vision:

* AMEC's vision is to be a leading provider of engineering and consultancy services to energy, mining and selected industrial customers

* Up to £100m return of capital to shareholders proposed

* Major performance improvement initiatives underway; target margin* 6% in 2008

* Built Environment businesses to be sold

Exceptional items:

* Provisions relating to disputes of up to £70m; impairment provisions and separation costs of £20m

* Aggregate post-tax exceptional gain** in 2006 not less than £160m

Trading update:

* Good performance in Natural Resources, Earth and Environmental and Investments

* 2006 profits expected to be £15m below the board's previous expectations, reflecting restructuring and legal costs in UK Construction and weaker than expected performance in Pipelines and Nuclear capital projects

* Average*** net cash approximately £200m, ahead of expectations

Chief executive Samir Brikho said:

"In my first two months I have discovered that AMEC has both a sound base of quality businesses and a great deal of untapped potential. The business suffers from complexity and an excessive cost base, but we now have a clear and deliverable plan to turn it around and transform financial performance.

AMEC will be a fitter organisation and more clearly focussed on client needs in attractive markets. The strong balance sheet will enable AMEC to both fund growth and return capital to shareholders.

As AMEC's new chief executive, I will bring to an end the uncertainty that has been hanging over this company for too long. AMEC will focus on high-end engineering and consultancy services in selected energy and industrial markets, where it has a good track record. I have already put in train plans for significant cost savings and operational improvements that will deliver to the bottom line in 2008 and beyond. Over the longer term, I will build on AMEC's strong market positions, using my experience in this field to build a leading business that will deliver value to our shareholders."

* Profit for continuing operations before net financing costs, exceptional items, intangible amortisation and joint venture tax, but including joint venture profit before tax, as a percentage of revenues.

** Post tax gain on sale of AMEC SPIE £305m, less post-tax exceptional charges June 2006 £65m and December 2006 up to £80m.

*** 1 August - 31 December 2006

Where do I go now?: » View the latest news items » View the news archive » Subscribe to Weekly Construction Newsletter » Submit news