Summary:
- Mixed H1 trading results
- Record solar and UK North Sea revenue, offset by weak performance from Americas O&G
- Non-cash impairment charge and asset write-offs of £440m (including Americas O&G and GPG)
- Interim dividend of 7.4p
- Reiterate key guidance
- Expectations for FY2016 trading result unchanged
- Target £500m of proceeds from disposals by June 2017
- Strategy, organisation and cost review initiated; to be completed in autumn
H1 2016: Key performance measures1
| £m unless stated, for 6 months ended 30 June | 2016 | 2015 | Change |
|---|---|---|---|
| Continuing operations | |||
| Revenue | 2,842 | 2,664 | +4%2 |
| Trading profit3 | 177 | 188 | -9% |
| Trading margin | 6.2% | 7.1% | -90bps |
| Trading cash flow | 125 | 84 | |
| Cash conversion | 71% | 45% | |
| Adjusted diluted earnings per share | 28.2p | 34.0p | -17% |
| Order book | 6.2bn | 6.6bn | -9% |
H1 2016: Reported under IFRS
| £m unless stated, for 6 months ended 30 June | 2016 | 2015 | Change |
|---|---|---|---|
| Continuing operations | |||
| Revenue | 2,842 | 2,664 | +7% |
| (Loss)/profit before net financing expenses | (414) | 83 | |
| (Loss)/profit before tax | (446) | 73 | |
| Cash flow from operations | 21 | (9) | |
| Diluted earnings per share | (115.8)p | 14.5p | |
| Interim dividens per share | 7.4p | 14.8p | -50% |
| Net debt | 1,084 | 957 | +13% |
Notes:
- Adjusted performance measures used by the group are reconciled to the equivalent IFRS measures in ‘Performance measures’
- Excluding the impacts of currency movements
- Trading profit represents profit before net financing expense excluding exceptional items, the amortisation and impairment of intangible assets (including the impairment charges at GPG and Americas) and asbestos-related costs (net of insurance recoveries). Trading profit includes the group’s share of the trading profit of joint ventures
Our industry continues to face very challenging conditions, with capital projects across natural resources markets being delayed and cancelled in many parts of the world.
Despite this, we continue to benefit from the diversity of our platform and we remain on track to deliver the operational guidance we gave at the beginning of the year.
I have initiated a wide-ranging review of the strategy, our organisation structure and cost base – which we are now part-way through. I expect to update investors on these issues in the autumn.
Jonathan Lewis, Chief Executive Officer, Amec Foster Wheeler plc