Amey UK plc, the support services firm, has announced a rise in profits for its 2005 financial results.
Turnover for the year was £1.2bn (2004: £961m) and profits rose 116 per cent to £52m (2004: £21m), a before tax margin of 4.3 per cent. These results were supported by strong cashflows and a net debt reduction of £22.9m whilst contract wins and extensions put the company’s order book at £5bn.
Amey’s EBITDA in 2005 was £94.4m (2004: £75.3m). During 2005 Amey consolidated a majority 66.67 per cent stake in Tube Lines after purchasing Jarvis JNP’s 33.3 per cent stake. The company also bought Jarvis LUL Ltd, which provides services to Tube Lines under a secondment agreement. The initial purchase consideration of £95.5m was financed by external debt of £40m and by a loan from Amey’s parent, Ferrovial Servicios, of £55.5m.
Mel Ewell, Chief Executive, said: “This has been a strong year for Amey in which we have seen significant improvement in our mainstream business activities whilst other areas of the business have shown impressive development and innovation. Our success is built on consistently excellent service provision to our customers.”
Mr. Ewell noted that Amey has started 2006 by signing facilities management contracts with Belfast City Airport and its first ‘Building Schools for the Future’ partnership with Bradford Council. “We are providing innovative quality services in areas as diverse as schools, roads and rail, helping our customers to improve their delivery of modern public services.”
Highlights
Business Services
Amey provides total facilities management and business process outsourcing services to a wide range of clients, both in the public and private sectors. In 2005 Amey made significant progress, rationalising its contract portfolio and gaining several important contract wins in target markets.
Strong performance in the EduAction joint venture with Nord Anglia led to the extension of that contract to 2008.
- The long term relationship with QinetiQ was strengthened with the signing of a further five year contract to 2010.
- Amey was announced as preferred bidder for the Bradford Building Schools for the Future project.
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A major restructuring programme has been undertaken that now sees the business focused around three strategic market segments – Central Government, Education and Health and Private Sector. A major focus on productivity, working methods and operational performance delivered excellent levels of client satisfaction as well as significant and consistent improvement in operating margins across virtually all contracts.
Infrastructure Services
The company aims to extend its service offering and deliver a wider range of capabilities. The climate for growth is supported by the government’s ‘Gershon’ agenda demanding procurement efficiencies by central and local government bodies.
In 2005 Amey performed well given the fundamental changes in the rail market which saw maintenance activities taken back in-house by Network Rail in 2004.
PFI Activity
Amey is a leader in the development and acquisition of PPP (Public Private Partnership) and PFI (Private Finance Initiative) projects that deliver high quality long-term operational revenues, requiring cross-disciplinary teams, structured finance or a combination of both.
During 2005, Amey pursued new opportunities in four strategic sectors: Health (large hospitals), Education (schools), Defence (asset management and accommodation), and Transport Infrastructure (roads and street lighting).
Amey is currently leading a number of different consortia bidding two Scottish schools projects, one schools project in Northern Ireland, two “Building Schools for the Future” projects and two major roads projects. One of these is for the widening of the M25 London orbital, which is a project valued at over £4 billion
- Amey continued the expansion of its portfolio of PFI investments with the financial close of the “Renfrewshire Schools” and “C Vehicles” contracts. These projects are now in their operational phase, with Amey involved in the management of their special purpose vehicles.
- A consortium led by Amey was selected as preferred bidder for the “Bradford Building Schools for the Future” contract and financial close is expected in the first half of 2006. This is one of the pathfinder contracts for a 15 year, £75 billion programme to rejuvenate all 3,500 secondary schools in England.
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On a number of the projects mentioned above, Amey is working with the international division of Ferrovial Agromán - the construction services division of Grupo Ferrovial.
Notes
Amey UK plc (“Amey”) is owned by Ferrovial Servicios, S.A., a wholly owned subsidiary of Grupo Ferrovial, S.A. which is a leading construction and services company based in Spain and listed on the Madrid stock exchange.
- In Local Government, the Bedfordshire County Council contract award represented a significant step in securing access to the Managing Agent Contractor market as a single organisation. The Cumbria County Council contract involved the transfer of the Council’s contract service staff into Amey bringing new commercially transferable capabilities.
- In Rail, the geographic footprint of Amey’s market presence has been broadened through successes which include the award of a £20m contract to regenerate the line at Ebbw Vale, a £15m contract in Port Talbot and a national Electrical and Plant (E&P) framework. A greater share of the On Track Machines market and a successful bid to supply tampers contributed considerably to the breadth of services already offered to Network Rail.
- Amey was ranked among Network Rail’s top ten performers out of its 3,919 suppliers.
- In Strategic Highways, the Scottish Executive South West Trunk Unit Operating Company contract was secured for a further five years, reaffirming the credibility of Amey’s single organisation approach. The increased market turnover also reflected Amey’s role in helping clients to secure budgets by developing robust cases for maintenance and improvement programmes. Additional professional services projects were won to develop GIS inventories and improve road safety.
- The ‘C’ Vehicles contract with the Ministry of Defence marked the start of services to the Defence market.