Future is uncertain for troubled Amey

Amey's future is hanging in the balance as its major shareholders wait to see if the troubled group's bankers are prepared to support its battle for survival.

Brian Staples, chief executive for five years, announced last week that he is to step down. Mel Ewell, currently the group operations director, has been upgraded to chief operating officer.

Geoff Allum, analyst with stockbroker Investec, said on Monday: "We need to be sure that Amey's banks will back them and we've not yet heard that. Amey has breached its banking covenants, it has no chief executive and no [permanent] finance director, so we're very much waiting for the banks.

"It's difficult from the outside to see the true state of play, particularly the group's balance sheet and the cash flow. Amey had the most opaque method of accounting for profits."

Kate Moy, analyst with ING, said: "Staples' position was untenable and it was no great surprise to hear that he was to go."

Despite Amey's share price having crashed from 700p to 30p in just 12 months, there is still a lack of new buyers. Chris Hurst, director of investments at the Co-operative Insurance Society and a holder of Amey shares, said he would not be buying at the moment.

"We have yet to be convinced that there will be a turnaround," said Hurst. "The causes of Amey's problems could be more deep-seated than just changes at the top."

Staples' agreement to quit with only half the money due to him under his contract (he still wins a £202,000 pay-off) has failed to placate major shareholders. Hurst said: "Executives should not be rewarded for failure."

No bids have yet been made for Amey. "It's such a basket case," said one analyst, "and even due diligence would be tricky."