SHARES in Cheshire-based international giant Amec tumbled today, knocking more than '54m off its '964m market value, despite up-beat half year results.

In early trading, shares slumped 17.5p (5.47 per cent), though its strategy of shifting from traditional construction to engineering services appears to be paying off.

Profits are continuing to rise at the group, which has been dogged by sluggish industrial demand in recent years.

The firm, which helped clean up the sites of the 9/11 hijack attacks on the United States, and which is now playing a leading role in the reconstruction of Iraq, with multi-million pound contracts there, posted a five per cent rise in first-half pre-tax profits, at '37.5m to the six months ended June 30, compared with '35.7m for the same period last year and below the '39m expected by analysts.

Turnover was '2.23bn compared with '2.32bn, with the order book at the half-year end standing at '3.3bn compared with '3bn at the end of December.

However, there was no contribution from the Iraq operations during the first half, nor compensation for UK rail maintenance contracts taken back in-house by Network Rail in July.

"Our exit from low margin, high risk construction reinforces our focus on higher value services," said chief executive Sir Peter Mason, who believes there are substantial future opportunities for the group in the energy and government sectors.

The group, the world's leading builder of foul-weather oil platforms, has been criticised by some analysts for spreading itself too thinly across to many areas, and underachieving.

But over the last six months it has been steady progress in its bid to switch the balance of its activities further towards engineering and technical services.

Its change in business focus now sees around half of its income generated outside the UK.

But UK government spending is a key driver for the business, with priorities for spending on hospitals, education, road, rail, defence and urban regeneration, expected to provide significant opportunities.

In March, in a joint venture with its American joint venture partner Fluor, it secured a leading role in the reconstruction of Iraq, winning contracts to restore power generation and water infrastructure.

The expected value of projects being worked on there, either by Amec or its joint venture, is around '280m.

Amec increased its interim dividend six per cent to 3.8p per share. Tweet