UK - A massive deterioration in business support services group Amey's pension fund will hit its profits, a City analyst claims.
The group published an FRS17 surplus of £5.5m at the end of December 2001.
But the analyst – who declined to be named – expects the firm to show an FRS17 deficit of £35m when preliminary results are published in March.
The group’s £215m pension plan was invested 87% in equities at the end of 2001.
The analyst said that as Amey’s pension fund was twice as big as its current market capitalisation, this would mean a significant rise in pension contributions and a subsequent drop in profits.
This concern comes as the group – which is heavily involved with the controversial public private partnership of the London Underground – announced that its chief executive, Brian Staples, would leave next month. He will be replaced by group operations director Mel Ewell.
Amey is one of the few companies which has adopted FRS17 in full early – a move boosted its 2001 profits by around £2m.
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