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Partnering boosts contractor profits

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GROWTH IN partnering and negotiated work helped contractors Amec, BICC and Mowlem increase construction margins and profits, according to results published last week.

Amec increased the amount of partnering work to 75% of its capital projects activity, while it accounts for 54% of Mowlem's construction work in Britain.

BICC is also increasing this type of work, although its results were hit by one-off losses on the sale of its cables and telecoms business and a shortage of major civils projects in Britain and Asia.

Last year, Amec's capital projects division increased operating profits from £20.6M to £31.1M on turnover up from £2.17bn to £2.23bn. Group pretax profits increased from £69M to £82.2M while turnover fell from £3.39bn to £3.1bn.

Mowlem's pre-tax profits increased from £39.4M to £41.1M on turnover up from £1.5bn to £1.6bn. Operating profits from construction activities rose from £12M to £14M despite restructuring costs of £1.4M. Turnover increased from £1bn to £1.14bn.

Underlying profit growth at BICC fell, with operating profits before exceptional items down from £70M a year ago to £51M. Turnover fell from £3.98bn to £2.9bn. Exceptional losses of £434M, mainly from the sale of the cables business, pushed BICC into the red with a pre-tax loss of £379M compared with a loss of £134M in 1998.

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