AMEC's move away from traditional contracting into higher-margin specialist work is paying off, the company claimed this week.

Chief executive Peter Mason released a bullish trading statement, saying Britain's largest contractor is on target to meet the City's expectations in its latest results. Analysts expect pre-tax profit in the order of £65m when it announces its results in March.

The City gave a tepid response to the trading statement, with Amec's share price dropping 2.5p to 177p.

Mason revealed that Amec's specialist service activities, which include its rail and infrastructure maintenance businesses, continue to lead the way for the company's fortunes. Mason announced an 18% jump in orders for the company's UK services division, with a total of £660m worth of work added to the company's order book in 1998.

Mason sounded a warning note about the UK economy, saying there were general uncertainties about future prospects. However, he said Amec is likely to sustain its progress for the foreseeable future.