US Edition AMEC
876p unch.
Questor says BUY
On Monday, AMEC said it had been awarded a £150m contract to build the two oil platforms for the project – both of which were linked by a bridge.
AMEC is focusing on providing construction and construction services in the natural resources, energy and power sectors.
The group has won a number of contracts recently. ACTUS, a joint venture with Jacobs Engineering Group, Costain and Babcock, recently won a £67m contract for decommissioning at the now closed Trawsfynydd nuclear power station in North Wales.
It was also awarded a three-year contract to supply radiological, environmental and site characterisation support to the Sellafield nuclear site in Cumbria.
AMEC also has an impressive balance sheet. It had net cash of £455m at June 30, representing 15pc of its current market capitalisation.
The group is looking for strategic purchases using its war chest – but also last year significantly increased its dividend policy.
In March, AMEC said it would rebase its dividend and increased the full-year amount to 26.5p – up by 50pc on the previous year. The interim payment in the current year was increased by 40pc.
There's also the carrot of a potential cash return to shareholders or buy-backs if AMEC fails to find a suitable acquisition for its cash pile within the next couple of years.
The shares were first recommended at 531½p on January 8, 2009, and they are up 64pc compared with a market up 19pc. They have been tipped as high as £11.90.
AMEC's shares trade on a December 2011 multiple of 12.8 times, falling to 11.1 next year.
The shares are a buy.