British engineer AMEC
The key thing about the buyback is it leaves us with ample capacity to continue to pursue, quite aggressively, acquisitions and there's plenty of opportunity out there, Chief Financial Officer Ian McHoul said on a call with reporters.
AMEC, which serves customers such as ConocoPhillips
Investors have been waiting for news on a cash return after AMEC said last March it would consider a buyback or one-off cash return should a major acquisition not materialise within 12 months, something which has not happened.
Even after returning 400 million pounds, we will still have cash on the balance sheet. We don't feel constrained in any way. We've got the ability to take debt on board to finance acquisitions, McHoul said.
AMEC does not have any debt and McHoul was confident of being able to borrow significant sums from a large number of banks. He said he was already in touch with lenders.
AMEC, which said the buyback would take place over a 12 month period, also said it planned to lift its full year dividend to 30.5 pence per share from the 26.5 pence in 2010.
AMEC posted full-year earnings before interest, tax and amortisation (EBITA) of 299 million pounds, 12 percent higher than in 2010, and slightly higher than an average forecast of 297 million in a company supplied poll of 16 analysts.
A strong performance in the North Sea, a contract win on the decommissioning of the Sellafield nuclear plant in northern England, plus a 21 percent jump in earnings in the part of AMEC's business which provides consulting and engineering for environmental and water projects, helped boost profits.
The company said it was targeting earnings per share of more than 100 pence by 2015, topping the 100 pence goal it announced in 2009.
The outlook for 2012 is underpinned by the positive industry backdrop and the strength of the order book, Chief Executive Samir Brikho said.
AMEC said profit margins would fall due to a shift in its business mix away from Canada's oil sands and towards the North Sea, and after it increasingly provided strategic customers such as BP
Any disappointment here should be tempered by two factors. First, management focus has shifted away from margins and towards revenue growth in the recent period. Second, the company's EBITA margin in 2011 was 9.2 per cent, marginally above our expectations, Shore Capital analysts said.
At 1000 GMT, shares in AMEC, which have gained 23 percent in the last three months, were steady at 1,109 pence, valuing the company at about 3.7 billion pounds.
(Editing by Matt Scuffham and Mark Potter)