Most of this spend will be targeted at technology designed to anticipate failures and improve punctuality, said chief executive Brian Staples.
"Railtrack has been burned by the rail regulator and government for not having a sufficient impact on late-running," he said. Railtrack can be fined up to £80 for a one-minute delay under new regulations. "That sort of money tends to focus people's minds," added Staples. Amey expects the investment to have a two-year payback period.
To anticipate failures, Amey is in talks with Railtrack about using its Remote Asset Management system on the whole network. This monitors the performance of signalling and track-switching equipment and forewarns of problems so maintenance teams can act before a failure occurs.
Profit before tax in the rail division fell 9% to £4.3m for the six months to 30 June 1999. Turnover was down to £52m, compared with £60m last year. Staples put the drop down to the loss of some contracts, including a repair-and-maintenance contract in the Newport area.
The Amey group overall reported pre-tax profit before exceptional items of £9.56m, an increase of 25% on the same period last year. However, the group's failed bid to buy Servisair at Christmas cost £1.27m, taking the figure down to £8.29m. Turnover rose £9m to £227m.
The group's Business Process Outsourcing Division raised pre-tax profit 130% to £2.9m on turnover up by one-half to £43.1m. The figures did not include results for support services business Comax, which Amey acquired for £86m in July. Staples said he expects some job losses as Comax is integrated into the group, but that he hoped most staff could be redeployed.
The company recently changed its stock market listing from construction to support services, and 90% of its profit comes from support services.
Staples said big clients would benefit most from this move. He said: "We won't have to go knocking on their door anymore and saying: 'We can do your support services,' only for them to say: 'You can't because you're a construction company.'" Amey still has a construction division, but Staples said that its role needs to be defined. "Construction in general has been locked in a time-warp of being project-focused," he said. "I want not just to build but to offer an end-to-end service for clients." Turnover in the construction division fell 7% to £93m; profit was down 30% at £800 000.
Staples said he was committed to bidding for the two sets of deep-tunnel lines that form part of the London Underground public-private partnership scheme.
Amey is bidding in a consortium with Bechtel, Hyder and Jarvis.
