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Acquisitive Amec continues its transformation

Amec is set to dip into a £500 million war chest to cement its position in new core markets.

AMEC is set to dip into a £500 million war chest to cement its position in new core markets.

The former contractor has been transformed into an engineering services company under the guidance of chief executive Samir Brikho.

His decision to sell its construction operations is likely to raise around œ350 million. This will give it a net cash position of £600 million by the end of the year, although this will be trimmed by £100 million with a share buyback.

The former boss of ABB's power systems division celebrates a year in charge of the firm at the beginning of next month and is expected to unveil at least one acquisition by the end of the year.

Firms understood to have been mentioned as likely takeover targets include offshore drilling contractor Abbot, and Petrofac, which designs and builds oil and gas facilities.

Mr Brikho said a "transformational" acquisition was on the cards but declined to give more details.

The firm has raised its pre-tax profit by œ5 million for this year. Analysts expect the 2007 figure to come in at around £105 million.

Pre-tax profits in the six months to June were transformed from a £24.7 million loss last time into a œ66.9 million profit in the first half, although this included nearly £20 million of pre-tax exceptional profits.

Underlying pre-tax profits from its continuing operations rose 127 per cent to £48 million. Turnover went up 14 per cent to £1.2 billion.