Amec goes into the red

Amec has gone into the red. Latest interim results from the global construction player show a huge turnover of £2.2bn but the end result was a pre-tax loss of £5m.

Chief executive Sir Peter Mason said: “Our exit from low margin, high risk construction reinforces our focus on higher value services. Looking forward, we see substantial opportunities to deliver value for shareholders by leveraging our market position.

“If traditional contracting is our past, strategic relationships in markets with high barriers to entry are definitely our future.”

Exceptional costs ran to £42m. Without the need to sort out various financial muddles, Amec would have made a pre-tax profit of £38m which represents an operating margin of 2.6%.

Amec said that wind energy is “expected to develop as a key sector” for the group. The Scottish Land Court’s decision to rule in favour of Amec’s Edinbane wind farm proposal on Skye means that construction can now get under way in 2005.

Amec has a portfolio of wind farms which now total over 2,000MW and represents 16% of the YUK government’s renewable target for 2010.

Further investments over the next five years are on the cards and are expected to produce 20% annual returns.