Amey crashes to £130m loss and abandons dividend

The troubled PFI contractor Amey revealed the scars from a crisis-torn year yesterday by reporting a £130m loss and warning that it would not resume dividend payments for at least the next 12 months.

Amey also confirmed that it would be axing 300 jobs as part of a cost-cutting plan designed to focus the group on transport and business outsourcing services such as IT and property management.

The huge loss was struck after £121.5m of exceptional charges to cover heavy losses on several construction projects, including the Croydon Tramlink .

Advisers fees paid mainly to Deutsche Bank and a string of accountants and lawyers for the renegotiation of its £220m bank facilities cost a further £8m while there were investment write-downs of £19.5m and restructuring costs of £4.6m.

Ian Robinson, Amey's chairman, refused to be drawn on whether the bid approaches the group received in January were likely to lead to an offer for the business but he did confirm that none of the approaches was from the existing management.

Mr Robinson said he believed that Amey could now draw a line under the past 12 months which have seen it part company with its chief executive and two finance directors, restate past year profits into heavy losses and delay taking up its one-third stake in Tube Lines, the consortium which has taken over three of London Underground's deep lines.

"I don't feel good about writing off more than £100m but we have come a long way since last October when people were writing that we would not survive," he said.

Amey is now seeking a new finance director to take over from Eric Tracey, the senior audit partner from Deloitte & Touche, who was parachuted in last year to help clean up the group's accounts and aid its debt renegotiation talks.

Mr Tracey said that following the heavy asset write-downs, Amey did not have distributable reserves to pay a dividend and said it would require a recapitalisation of the group's balance sheet before it was able to resume payments. This was unlikely to happen for at least a year.

Mel Ewell, who took over in January as chief executive from Brian Staples, said that part of Amey's problem in the past had been that it pursued growth too aggressively, resulting in it bidding for too many PFI projects.