So it looks like Amec is hell-bent on abandoning the construction sector.
Sir Peter Mason, the firm’s chief executive, has indicated that he is likely to ask the stock exchange to reclassify it as in the support services sector, where the grass is greener and the earnings multiples higher.
With shares in Amec trading at a 15-20% discount to those companies listed in the support services sector, it is not difficult to see why the move is attractive. Still, many in the market view the company as a traditional contractor.
Mason responds that two-thirds of its earnings are derived from services, but whether or not it follows the example of others before it – including Amey, Jarvis and Interserve, which were all reclassified as support services firms – analysts say the path to better ratings should be paved by growth, irrespective of the listing.
No doubt Mason was disappointed to find that as the rumours of a takeover died away, so did the steady increase in Amec’s share price. It fell 2% last week to 319p.
Yet it is not all autumnal chill for construction. As results season continues, strong performances from most companies are pushing the sector up. Last week, shares rose for the fourth consecutive week, up more than 2% to 2902 (see graph). By contrast the all-share index remaining little changed from the week before at 2260.
Despite fears that the housing market is set for tough times ahead, roused mainly by the rise in interest rates and a slow July and August, housebuilding shares performed well.
Bovis Homes revealed a 46% rise in pre-tax profit to £67m in the six months to 30 June, which sent its price up 6% to 591p. The results drove shares in other housebuilders; Barratt, Berkeley, Taylor Woodrow, George Wimpey and Westbury all rose more than 2%.
The star performer of the sector overall was Mowlem, after its interim results pointed to a solid second half performance. Shares jumped 15% to 193.25p.
Retirement homes specialist McCarthy & Stone was another good performer – shares rose 5% to 605p after a positive trading update ahead of its November annual results.
Shares in the construction sector’s FTSE 100 companies, Hanson and Wolsey, rose 2% to 390p and 887p respectively.