Amec Foster Wheeler confirms no dividend after 2016 earnings fall

Amec Foster Wheeler posted its final, audited results for the 2016 year on Tuesday, confirming they were “in line” with the 13 March update it released last month.

The FTSE 250 company reported an underlying 8% decline in adjusted revenue to £5.44bn, with adjusted trading profit falling 15%, or 22% on an underlying to £318m.

Its trading margin was down 110 basis points at 5.8%.

Adjusted profit was off 24% at £254m, and trading cash flow was down 3% to £375m.

The firm’s cash conversion stood at 118%, compared to 104% in 2015.

Adjusted diluted earnings per share ended the year down 26% at 50.4p.

The year-end net debt-to-EBITDA covenant ratio was 3.3x, and the board said a restated covenant was agreed with lenders of up to 4.5x until June 2018

There was also confirmation that no final dividend was being recommended, though it did say its non-core disposal programme remained “on track”.

Amec Foster Wheeler’s board also projected that a shareholder vote on the offer from Wood Group was expected in June.

“Given conditions in natural resources end markets, our 2016 trading performance was robust, as we benefited from the breadth of our business - especially the record performance from solar - cost saving actions and the fall in sterling in the second half of the year,” said chief executive officer Jon Lewis.

“We continue to expect another year of decline in oil and gas activity in 2017 and for solar activity to reduce significantly from the record levels seen in 2016.”

Lewis said the board also expected that there would be a “better performance” from environment and infrastructure, and a further significant contribution from standalone overhead cost savings.

“This year, we will continue to leverage the outstanding technical expertise of our people to best serve our customers and deliver projects safely across all the markets in which we operate.

“This and the improvements we have made to the business will ensure we continue to make significant progress in 2017.”