February 13, 2014 / 10:26 AM / 4 years ago

UPDATE 1-Amec lifts dividend after rise in profit, record order book

LONDON, Feb 13 (Reuters) - British engineering firm Amec proposed a higher than expected dividend on Thursday after posting a 3 percent rise in full-year core profit and a record-breaking order book.

The company also said it had firmed up its $3 billion acquisition of rival Foster Wheeler, the first sizeable deal in the sector in years which its chief executive said could trigger a wave of consolidation.

Amec, which provides services and equipment for the oil and gas, mining, nuclear and renewable energy sectors, proposed a 2013 dividend of 42 pence a share, up 15 percent on the previous year and five percent higher than analyst expectations.

Amec’s shares were up 5 percent at 0938 GMT, outperforming the wider market.

Earnings before interest, tax, depreciation and amortisation (EBITDA) rose 3 percent to 343 million pounds ($569 million) last year, and the firm’s order book reached a record 4.1 billion pounds.

“Amec acquiring Foster Wheeler is going to be a start of something to happen in the industry,” said Amec chief executive Samir Brikho, predicting a phase of consolidation in the oil and gas sector that has seen a drought in deals in recent years.

Amec’s 680 million pound bid for British peer Kentz was rejected by Kentz’s board last August.

The engineering firm said it had been hit by weak prices and demand in Britain’s power market, with its UK conventional power segment posting a loss before tax of 10 million pounds.

The company said on Thursday it had decided to discontinue this part of the business and would instead focus on more complex sectors such as nuclear and renewable energy.

Amec’s contract, with U.S.-based URS and France’s Areva, to decommission a nuclear power plant at Sellafield in northwest England came under attack earlier this week as an influential parliamentary committee criticised it for cost overruns and delays.

“We are up for the challenge, we have changed a number of people in the team,” Brikho told journalists of the Sellafield contract, which was renewed for five years last October.

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