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Last Updated:  Wednesday, 26 March, 2003, 12:17 GMT
Amey sees light at end of tunnel
London underground trains
Amey is concentrating on transport
Investors are banking on a brighter future for troubled engineering firm Amey.

The company, which is being lined up to help run London's underground system, posted hefty annual losses of 129.5m ($204m; 191m euros) on Wednesday.

But its shares leapt 13% to 413.5p in early trading as investors took heart from a 3.7bn order book and an upbeat assessment of current trading conditions.

The Oxfordshire-based firm has been rocked by accountancy problems over the past 18 months after a series of government contracts turned sour.

Tube windfall

It is also facing a 48.5m black hole in its pension fund.

As a result, it said it will not be paying a shareholder dividend for the foreseeable future.

However, Amey said it expected to more than double turnover by 2005.

The company said it could be in line for a cash windfall of 6bn or more if its share of the London underground contract is fully taken up.

Amey is a part-owner of the Tube Lines consortium taking over maintenance and infrastructure work on the Jubilee, Northern and Piccadilly London Underground lines.

PFI troubles

The company was at the forefront of the private finance initiative (PFI), where private companies fund public works in exchange for a guaranteed revenue stream from the government.

But in March last year it stunned investors when it unveiled an unexpected loss after it changed its PFI accountancy procedures.

Since then it has attempted to extricate itself from the PFI business and is in the process of selling all of its contracts to Laing.

It has focused instead on transport and business services, both sectors which are expected to remain strong.

The company manages and maintains 25% of English and half of Scottish trunk roads and holds a 12% share of the rail maintenance market.

Growing turnover

Amey's 129.5m loss, unveiled on Wednesday, compares with losses of 18.3m in 2001.

It comes after one-off accounting charges worth 121.5m, primarily linked to heavy write-downs on the value of its assets.

Turnover was up 10% to 867.5m.

The company said it expected turnover to exceed 700m in 2003 and 2004, before rising to 2bn in 2005 and beyond.

Chairman Ian Robinson said: "Our core businesses have experienced some positive momentum since the outset of 2003.

"Our workload for the current year is substantially secured and the company is in significantly better shape."

Amey chief to step down
02 Jan 03 |  Business
Amey disappoints investors
30 Dec 02 |  Business

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