Australia | Nov 02 2006
By Rudi Filapek-Vandyck
The last time we reported Downer EDI (DOW) being the subject of takeover rumours in the London market, the company responded by issuing a profit warning soon after. We have no idea how this will affect any developments in November as our sources have again informed us Downer is mentioned as a possible suitor. This time the potential victim is Amec Plc.
London-listed Amec profiles itself as an international project management and services company. The company specialises in Engineering and Technical Services (including environmental services), services to the oil and gas sector (with market-leading expertise working in “hostile deepwater environments”) and a so-called Project Solutions division aimed at construction services and PPP projects (ventures between governments and private companies).
Amec shares in London rose nearly 1% overnight, which does not seem that unusually high, but trading volume certainly was. In addition, one of the company’s key shareholders, Fidelity, seems to have used the spike in trading activity to sell down part of its shares.
Company announcements to the stock exchange show Barclays has been selling down its stake in the company recently as well. ABN Amro however has been on the buying side.
According to broker earnings forecasts displayed on Amec’s website the company’s earnings are expected to make quite a jump in 2007. Current consensus forecast is for the company to report a net profit of GBP102.66m in 2007, which translates into an EPS of 21.69p and a dividend payout of 12.44p. These figures compare with a net profit of GBP76.02m, EPS of 15.76p and a dividend of 12.04p for this year.
More information on Amec can be found at www.amec.com