Samir Brikho, the chief executive of Amec, has made it his mission to “end the uncertainty that has been hanging over this company for too long”. But that may prove difficult while doubts remain over its financial position and the future of its construction business.
Just two months into his job, after inheriting problem contracts from former chief executive Sir Peter Mason (see box below), Brikho has instigated a radical review, the result of which will be the sale of the construction business and a focus on consultancy and engineering in oil, gas and nuclear.
But, while City commentators are backing Brikho (right), they believe that more uncertainty lies ahead and that, as one source put it: “We’ve heard it all before from Amec.”
Several industry sources said finding a buyer for the construction arm could prove difficult. One said: “They may struggle to sell the construction and building business, but there is value in building and facilities services and its PPP investments.”
Howard Seymour, an analyst at Bridgewell Securities, said: “The question remains for the construction business: will anyone buy it?”
They will struggle to sell the construction and building business but there is value in building and facilities services and its PPP investments
Source close to Amec
Seymour added: “On the one hand it looks like what Brikho is planning to do will make sense, but obviously there are a lot of issues in terms of cash.”
Financially, the company is not in a strong position. In a statement on Wednesday, , Amec said that it had net cash of £200m. However, after the latest £90m hit and further commitments, Seymour said the figure was more like £10m.
City sources say that the most likely buyer would be a European contractor like Hochtief, which has demonstrated an appetite for UK PPP. Laing O’Rourke, which picked up the troubled construction arm of John Laing for just £1 in 1999, has also been mentioned, as have major contractors Balfour Beatty, Carillion, Morgan Sindall and Skanska.
• Amec is offering workers triple time and huge bonuses to work on its Thameslink railway project at King’s Cross, north London, over Christmas. It is understood that it wants workers for a seven-day period. Unconfirmed reports suggest they are being offered about £6,000.
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