Amey has recorded a second consecutive year of losses, amounting to £428m before tax for the year to December 2018, as it continues to feel the effects of its troublesome Birmingham PFI contract.
The asset services specialist has recorded revenue up 5.7% to £2.32 billion.
The firm benefitted from the sale of joint venture investments and from Carillion’s collapse at the beginning of 2018, taking full responsibility for delivery of its joint venture FM contracts for the Ministry of Defence, but this failed to bolster Amey from losses elsewhere.
Amey’s losses for 2018 include £123m of direct cost associated with the Birmingham highways PFI contract.
The firm has also written down £314m of goodwill impairment charges in reflection of difficult conditions in the waste and utilities markets. This follows a loss of £208m recorded in 2017, mostly due to the troublesome highways PFI.
In 2018, Amey was forced to settle its disagreement with Birmingham City Council after the Appeal Court overturned a judgement in the firm’s favour. The settlement has released Amey from the PFI contract at a cost of £215m, which will be paid in instalments up to 2025.
Amey will formally exit the contract in September 2019, which will aid owner Ferrovial’s efforts to find a buyer. In May this year, the Spanish infrastructure giant announced its intention to sell Amey separately from the rest of its asset support division due to the continuing difficulties in Birmingham.
“Release from this difficult contract is hugely significant for the Amey group and enables the business to capitalise on the major changes that have been made over the past three years and focus on success,” said Amey chief executive Andy Milner.
Amey has reported some big wins over the past year, including the £5bn, 15-year Wales and Borders rail franchise in joint venture with Keolis. Amey also picked up the £325m, Area 10 motorway and trunk road maintenance contract with Highways England. Taking over full responsibility for a £550m contract with the Defence Infrastructure Organisation (DIO) following Carillion’s collapse helped to increase revenue from Amey’s Facilities Management business to £738.8m in 2018.
