Carillion has reported a 28% increase in pre-tax profit to £147.7m for the year ending 31 December 2009, after a strong performance in the Middle East and the UK.
The construction and support services group also enjoyed a 4% rise in revenue to £5.4bn.
Carillion said it had an order book of £17.7bn, down from the £20.4bn reported a year ago, but forecast further progress in 2010. Some £11.1bn of its orders are in support services.
The group ended the year with net cash of £24.9, compared with a net borrowing figure of £226.7m at the end of 2008.
During the year, Carillion generated cash of £102.4m after disposing of two non-core businesses, IT Services and Enviros, and outsourcing internal IT services.
The sale of four PPP investments generated proceeds of £100.7m
Its Middle East construction services business continued to perform well, contributing 21% of total underlying operating profit at an improved operating margin of 8.5% (2008: 7.4%), following expansion into Abu Dhabi and a strong performance in Oman.
The rest of its construction services division contributed 13% of total underlying operating profit at a “stable” margin of 1.4%.
Carillion incurred “rationalisation” costs of £9.9m due to redundancy and other costs associated with reorganising the Group's structure at the end of 2009. This included reducing the size of its UK business to reflect “the expected decline in our general construction markets”.
Carillion JM, formerly part of Mowlem prior to its acquisition by Carillion, had to pay a fine of £5.4m to the Office of Fair Trading following its investigation into cover pricing in the construction industry.
Philip Rogerson, chairman, said: “Carillion achieved its objective of delivering materially enhanced earnings in 2009, despite challenging market conditions.
“In view of the wider economic environment, we expect market conditions to remain challenging in 2010. However, our performance has demonstrated that the Group has a resilient business mix, including strong international businesses, a substantial high quality order book, a good pipeline of contract opportunities, good cash flow and a strong balance sheet.
“Consequently the Group continues to be well positioned and we believe that we will make further progress in 2010."
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