Amec to relist as support services company

The change will be effective from Monday 22 November.

In recent months Amec has been keen to stress that the majority of its earnings are derived from support services work, and that the business has been misunderstood.

Stephen Bowcott, managing director of Amec construction services, said that Amec was no longer a one-off builder and that it would not build for one-off clients unless an emerging market came along in the next few years. He added that the business would focus on long-term partnering, alliance and framework deals within Amec’s core markets of transport, oil and gas, education and health.

Amec said that the FTSE global classification committee had suggested the switch, but City sources speculated that it was

an attempt by Amec to receive a higher rating.

One City source said: “It is dubious if it has been done to improve its rating.”

Bowcott said two-thirds of Amec’s £4.7bn workload was in the high value services market. He said:

“It’s a logical step as 75% of our work globally is in services, and 75% of our operation in the UK built environment sector is in services.”

It follows in the footsteps of a host of other companies that made the switch to a support sector listing, including Jarvis, Peterhouse, Amey, Laing and Interserve.

Michael Donnelly, analyst at Bridgewell Securities, said: “The days when you could get rerated are long gone.” But he questioned whether it was right for Amec to define its work in Iraq as support services and not construction.

Bowcott added that in the new year the company would be launching a safety initiative that had already been in operation within the company’s oil and gas division. The plan is to roll out the “incident and accident free” safety programme across the construction services division over the next two years.

Bowcott said the plan would cost £250,000 a year to train the 2500 staff in the construction services division. The scheme would then be rolled out across the company.