In the challenging conditions we find in many of our markets our priorities are clear: to make the most of the integrated Amec Foster Wheeler platform, innovate and adapt to offer customers relevant services and continue to keep a tight control on our own costs.
I continue to believe our low-risk, multi-market model is a strong platform from which to create long-term value for shareholders.
H1 2015: Key performance measures1
| £m unless stated, for 6 months ended 30 June | 2015 | 2014 PF2 | Underlying change3 | 2014 AMEC only |
|---|---|---|---|---|
| Continuing operations | ||||
| Scope revenue4 | 2,581 | 2,613 | -4% | 1,808 |
| Trading profit5 | 188 | 243 | -24% | 152 |
| Trading margin | 7.3% | 9.3%6 | -200bps6 | 8.4% |
| Trading cash flow | 84 | - | - | 39 |
| Cash conversion | 45% | - | - | 26% |
| Adjusted diluted earnings per share | 34.0p | - | - | 39.1p |
H1 2015: Reported under IFRS
| £m unless stated, for 6 months ended 30 June | 2015 | 2014 AMEC only | Change |
|---|---|---|---|
| Continuing operations | |||
| Revenue | 2,664 | 1,858 | +43% |
| Profit before net financing expense | 83 | 76 | +9% |
| Profit before tax | 73 | 83 | -12% |
| Cash flow from operations | (9) | 11 | n/m |
| Diluted earnings per share | 14.5p | 19.8p | -27% |
| Dividend per share | 14.8p | 14.8p | - |
Outlook statement
Our expectations for the group’s full year results remain consistent with previous guidance: underlying scope revenue is expected to be modestly lower than last year’s pro forma result, and we continue to expect a reduction in trading margins. For the full year, based on current forecasts, scope revenue will benefit by c. £50 million from a stronger US dollar.
We expect to see challenging market conditions continue – particularly in upstream Oil & Gas and Mining. Downstream Oil & Gas, particularly pet-chem, continue to be resilient. Clean Energy E&C scope revenue is likely to be lower than in 2014, due to delays to the start of work for significant projects in our order book. Our strong pipeline also gives us confidence that we will see further progression in the order book.
Notes:
- Adjusted performance measures used by the group are reconciled to the equivalent IFRS measures in the ‘Performance measures’ section
- Unaudited pro forma information provided for comparative purposes only, assuming the AMEC and Foster Wheeler businesses had been combined from 1 January 2014. A full description of the adjustments can be found at the beginning of ‘Performance measures’
- As reported by AMEC
- Scope revenue represents reported revenue less pass-through procurement revenue
- Trading profit represents profit before net financing expense excluding exceptional items, the amortisation of intangible assets and asbestos-related costs (net of insurance recoveries). Trading profit includes the group’s share of the trading profit of joint ventures
- Includes £20m one-off income from a license settlement within GPG. The impact on group trading margin is c. 80 basis points, and excluding this, the comparable margin in 2014 was 8.5%.