Amec puts its £1.3bn-a-year Built Environment businesses up for sale

Amec has come clean on another bout of one-off costs. It has also at last officially stated that its entire Build Environment division is for sale.

The four businesses seen as non-core are:

• Building and Civil Engineering
• Building and Facilities Services
• Property Developments
• PPP

Amec said that they generated a profit of £14m during 2005 from a turnover of £1.3bn.

Amec has been dogged by a lack of credibility over its stated profits for the past five years. Debt had mounted to more than £400m. The group started to put its house in order last year by selling Spie, a French-based division for a remarkable price, a move that triggered a one-off gain of £305m.

This gave Amec some breathing space. Sir Peter Mason’s long rein has ended and new chief executive Samir Brikho took over the reins on 1 October.

His review, published today, was expected to contain further major shocks as previous attempts to restore credibility had failed to satisfy the City.

Speaking this morning, Brikho said: “In my first two months I have discovered that Amec has a great deal of untapped potential. The business suffers from complexity.”

“I will bring to an end the uncertainty that has been hanging over this company for too long.”

There have been a variety of enquiries about the businesses in recent months. A spokesman said the sale process is expected to run through to the end of 2007. “This is not a fire sale,” he said.

The cost of making the businesses palatable is proving costly. The total put aside to cover potential losses on five major long-completed projects has been increased from the existing figure of £90m to a new high of £140m.

The Thelwell viaduct is one of the five projects, the others are in America.

“For us, it’s a change of approach,” said the spokesman. “We had been in full-on fighting mode.”

Amec’s provision against future litigation has also been lifted and now stands at £90m.

Buchans, the group’s pre-cast concrete manufacturing business, which has been loss-making for some years, will also be sold. Amec will pay £15m for someone to take it away and leave Amec with no further liabilities.