Engineering group Amec has added nearly 4% after releasing a positive update in connection with its purchase of US group Foster Wheeler.
The company said trading had been in line with expectations since its half year report in August, and the outlook remained unchanged. It repeated forecasts of a £250m hit to revenues and £25m to trading profits due to currency effects. It said:
Amec continues to see less greenfield activity in some of the group's key upstream oil and gas markets, which is partially offsetting the strong growth from Clean Energy and Middle Eastern Oil and Gas. Amec expects to see modest underlying revenue growth in 2014 for its existing operations, led by ongoing strength in the Clean Energy market and Middle Eastern Oil and Gas. As discussed previously, the mix of business will result in a slight reduction in group margins compared to last year. As in 2013, profits and cash flow generation will be second-half weighted.
Its shares have climbed 38p to £10.83 after the update, but Liberum analysts issued a sell note, saying:
As part of the Foster Wheeler acquisition process, Amec has filed its SEC registration document and released a statement on current trading, trends and prospects.
[There is] no change to [our] forecasts. We remain concerned about the environment for all Oil Service shares and do not believe the Amec price is back at a level where it is attractive.
