Amey spots silver lining

A leading civil engineering contractor this week predicted a œ1.6 billion a year boom for the industry, more than compensating for planned cuts to road spending.

Amey, which has half its œ220 million turnover in roads, estimated that out-sourcing of local authority road and winter maintenance would guarantee contractors œ600 million of work a year.

More important, the company says the trend will be reinforced by Highways Agency plans to privatise national road maintenance.

The company also forecasts that œ1 billion of track maintenance and infrastructure renewals will be put into the hands of the private sector, regardless of who wins the next election, and whether the rail sell-off is ultimately scrapped.

Speaking at Amey's results, chairman Neil Ashley said Amey had hiked its maintenance and reconstruction work from 30% to 50% of its roads turnover.

But he claimed major contractors are poorly placed to adapt to the new opportunities.

Amey's success in the maintenance field - it already looks after 800km of road - helped bolster group performance in 1994, which saw profits rise to œ5.1 million on turnover up œ12 million to œ220 million.

Orders for this year are already up 58% at œ331 million - although this reflects a number of long term contracts lasting up to five years.

The construction division was the backbone providing œ213 million of turnover and œ4.45 million profit. This despite a œ300,000 loss in the œ65 million building operation because of poor margins.

Facilities management provided a healthy œ657,000 profit on fee income of œ4.4 million. The division has recently signed one of the largest FM awards with Portsmith City Council.