AMEC has been rumoured to have looked at a number of British groups over the past few months and was seen as a potential bidder for the construction division to be spun off from Tarmac.
Peter Mason, the AMEC chief executive, admitted that the company had looked at domestic construction companies but said it had "no particular interest in acquiring volume in traditional building and civil engineering in the UK market".
Mr Mason did not rule out bolt-on purchases in Britain but said that Amec's primary focus was to expand in Europe. The company already owns a 42 per cent stake in Spie Batignolles, a French engineer with yearly sales of pounds 1.6bn, and is likely to exercise its option to buy the rest in 2001.
AMEC reported a 50 per cent increase in 1998 pre-tax profit before exceptionals to pounds 71.4m, on turnover marginally higher at pounds 3.4bn. The market welcomed the result and AMEC's shares soared 25p to an eight-year-high of 238.5p.
The key to AMEC's success is its ability to move away from the cut-throat contracting business into higher-margin negotiated agreements, where contracts are not awarded to the lowest bidder.
The turnaround is under way but, with margins of just 1 per cent in some businesses, there is still a long way to go. With the shares on just 12 times the 1999 earnings forecast of around pounds 83m, it is worth buying into AMEC's transformation.