Profits dip at Carillion
Carillion has reported a 5% drop in pre-tax profits for 2016 on revenues up 14%.
Carillion’s total revenue for 2016 was £5,214.2m (2015: £4,586.9m).
Pre-tax profit was £146.7m (2015: £155.1m), with the fall being attributed to reductions in Middle East construction services and public private partnerships. Two-thirds of the profit came from support services, which generates approximately half group revenue.
The Construction Services division (excluding Middle East) made an underlying operating profit of £41.3m (2015: £37.8m) on revenue up 21% to £1,520m (2015: £1,258m). Growth was driven by UK activity, with revenue here rising from £1.2bn to £1.5bn.
In Canada, Carillion is now focusing only on construction for public private partnership projects and revenue therefore dropped from £107m in 2015 to £67m in 2016.
The construction operating margin was 2.7%, down from 3.0% in 2015, but still within the target range of 2.5 to 3%.
Chairman Philip Green said: “In 2016, Carillion's performance was led by revenue growth and an increased margin in support services, together with good cash flow. Given the size and quality of our order book and pipeline of contract opportunities, our customer-focused culture and integrated business model, we have a good platform from which to develop the business in 2017. We will accelerate the rebalancing of our business into markets and sectors where we can win high-quality contracts and achieve our targets for margin and cash flows, while actively managing the positions we have in challenging markets. We will also begin reducing average net borrowing by stepping up our ongoing cost reduction programmes and our focus on managing working capital."
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This article was published on 1 Mar 2017 (last updated on 1 Mar 2017).