Speaking to 好色先生TV this week, Mason said the shift in emphasis could lead to the purchase of at least one US design-and-build business before the end of 2000.
But he added that this would not necessarily lead to the disposal of the group鈥檚 current US business, Morse Diesel.
By the end of the year, Amec will have completed a strategic review of its US business that is intended to determine which market sectors the company should target next. Mason is looking at a number of markets, including pharmaceuticals and utilities, where Amec has considerable experience in the UK.
Funding delay hits profit
Mason said he instigated the review because Morse Diesel, which has built high-rise office developments in US cities including New York and Chicago for more than 50 years has been underperforming on margins.
鈥淲e need to change our focus because, despite the buoyancy of the US market, we are still finding it very difficult to knock out a decent margin,鈥� he said.
He explained that Morse Diesel鈥檚 problems centred around the tendering processes for office developers. In the USA, this type of job usually goes out to tender before the client has funding. The contractors bid for work, then negotiate a final price before selection. But construction will not start until funding is secured.
鈥淣ormally this takes a few months, but this month in Chicago we got through a glut of about 拢400m of projects that had been in this preconstruction phase for 12-18 months. We expect a further 拢400m-500m to come through in the next six months.
鈥淚n that phase, we don鈥檛 recover our overheads and we have really suffered as result,鈥� he said. 鈥淪o whilst we have some terrific projects and some very able people, it is not the best sector for us to be in.鈥� Mason said the company would now look to work in high-growth sectors and areas where Amec has, or could buy in, a strong design capability.
Mark Hake, analyst at Merrill Lynch, said the move made good sense: 鈥淎mec does need to refocus its US activities if it genuinely has ambitions to be a global player. Its expertise is not really in office developments but in added value, civil engineering, infrastructure and offshore oil and gas-type work.鈥�
Selecting UK targets
For Amec鈥檚 UK business, Mason said he thought utilities and telecommunications had 鈥渧ery considerable growth prospects鈥�. He said outsourcing, maintenance and remedial work were all growing areas in these sectors, particularly as many clients are rationalising their supplier bases.
鈥淯tilities is a fairly unsexy sector but it has a very big spend, and its spend compared with rail is huge,鈥� he said.
Mason said work for the rail industry had limited prospects as it was not an expanding market.
鈥淚n two to three years, capital projects work will peak and then decline,鈥� he said.
But he believed work for the offshore oil and gas industry 鈥� where Amec already has a number of partnership deals set up, including one with BP Amoco 鈥� would grow strongly as more clients rationalised their supply base.
Mason also expressed concerns that the government was 鈥渟oftening鈥� its approach to the private finance initiative.
鈥淚t is possible that, eventually, PFI will simply mean providing the money and building the asset, rather like a property developer. This is less attractive than design, build, finance and run,鈥� he said.
Mason said the company鈥檚 current plan was to acquire the balance of French electrical engineering and building contractor Spie, in which it has established a 41.6% stake within two years.
He said this would mean a third of Amec鈥檚 business would be in the UK, a third in France and a third in the rest of the world. 鈥淭hat would give us the best balance compared with the rest of the European construction industry,鈥� he said.
