£400m buyback but AMEC still on lookout

“The key thing about the buyback is it leaves us with ample capacity to continue to pursue, quite aggressively, acquisitions and there’s plenty of opportunity out there,” chief financial officer Ian McHoul said.

AMEC, which serves customers such as ConocoPhillips, GDF Suez and Centrica across the mining, oil and gas, nuclear power and renewable energy industries, said it was looking for deals in all of its sectors, as well as in Asia, Latin America and the Middle East.

Investors have been waiting for news on a cash return after AMEC said last March it would consider a buyback or one-off cash return should a major acquisition not materialise within 12 months, something which has not happened.

“Even after returning £400m, we will still have cash on the balance sheet. We don’t feel constrained in any way. We’ve got the ability to take debt on board to finance acquisitions,” Mr McHoul said.

AMEC does not have any debt and McHoul was confident of being able to borrow “significant sums” from a large number of banks. He said he was already in touch with lenders.

AMEC, which said the buyback would take place over a 12-month period, also said it planned to lift its full year dividend to 30.5p per share from the 26.5p in 2010.

AMEC posted full-year earnings before interest, tax and amortisation (EBITA) of £299m, 12 per cent higher than in 2010, and slightly higher than an average forecast of £297m in a company supplied poll of 16 analysts.

A strong performance in the North Sea, a contract win on the decommissioning of the Sellafield nuclear plant, plus a 21 per cent jump in earnings in the part of AMEC’s business which provides consulting and engineering for environmental and water projects, helped boost profits.

The company said it was targeting earnings per share of more than 100p by 2015, topping the 100p goal it announced in 2009.