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29Apr93 UK: AMEY CUTS RISKS AND LOOKS TO BUY - ANNUAL RESULTS.

Bad debts and re-organisation costs have knocked profits at Amey Holdings, the expanding contractor bought out by its management from Hanson three years ago.Pre-tax profits fell to £2.1 million last year (1991: £2.8 million) after the group faced exceptional costs of £800,000.Amey's subcontracting operations, including the road planning arm Asfare, faced bad debts of some £200,000 partly caused by losses on the demise of Lilley.A re-organisation of the group's building company and its Amey Mec-Tric M and E business, which together involved around 50 job losses, produced a further £400,000 in exceptional costs.The group also faced £200,000 of exceptional redundancy costs for former staff of failed contractor Farr, after a tribunal ruled that Amey's purchase of its contracts represented a 'transfer of undertakings'.But chairman Neil Ashley, who owns a 17 per cent stake in the group, said Amey had 'achieved a thoroughly satisfactory performance'.Operating profits rose by 27 per cent to £2.7 million and its order book rose by one-quarter during the year to £157 million. Turnover climbed by 14 per cent to £165 million and is expected to reach £200 million this year.Mr Ashley sid Amey was 'moving away from higher risk areas' into fields such as facilities management, where it won contracts worth £40 million last year, and motorway maintenance and management.The group was also 'keeping its eyes open' for acquisitions and is reported to have been shortlisted as a potential buyer for one of the PSA's regional building management operations currently being sold.Mr Ashley sees an eventual turnover of around £300 million as a 'critical mass' for the company and a public flotation could follow.Amey Construction had a record year with a 20 per cent rise in turnover, thanks partly to more water work. CONSTRUCTION NEWS