The group's 1999 pre-tax profit fell from £28.7m to £19.8m after Amey fell into line with other support service firms and started treating PFI bid costs as expenses instead of as assets.
Amey announced the move this week as it posted pre-tax profit of £39.3m for 2000 on turnover of £700m.
A row broke out last week as analysts criticised Amey's tactic of capitalising bid costs for PFI projects, treating them as assets regardless of whether the bid was successful. They claimed that this tactic overstated Amey's profit.
A spokesman for the group denied that the criticisms had prompted the policy change. He said Amey had taken the decision a "long time ago" to switch to a more conservative policy, but had been unable to reveal this last week because it was in the closed period before its results were announced.
He said: "It was a clear business decision. It's as simple as that; there wasn't any pressure. We're now recognising bid costs as expenses earlier in the process and as income later. It's a much more conservative approach." Analyst Michael Parkinson, of stockbroker Brewin Dolphin, raised the issue last week when he accused Amey of overstating profits.
He said Amey's accountancy policies differed from comparable companies such as Jarvis, Amec and WS Atkins. These companies, and now Amey, list bid costs as expenses. If the bid is won, the costs are set off against assets on their asset balance sheet.
Another analyst said, although Amey's tactics were unusual, they were not misleading.
He said: "Amey is probably out there on its own. But as long as you know the numbers, it's not misleading." Despite the furore, the City this week reacted positively to Amey's results. The shares closed up 41p at 415p on Tuesday, the day the results were announced.
Positive feelings about Amey further increased after the company announcement that it had won a £560m infrastructure maintenance contract with Railtrack.
