For the six months ended 30th June 2015 Carillion generated revenue of £2,258.6m (2014 H1: £1,871.0m). Pre-tax profit was steady at £67.5m, the same as last year. Underlying operating profit rose 16% to £112.5m, giving a reduced margin of 5.1% (2014 H1: 5.5%).
Support services remains Carillion’s largest and most profitable division, making a first-half operating profit of £58.3m on revenue of £1,238.5m (2014 H1: £55.3m from £1,100.8m).
Revenue from construction services excluding the Middle East (which means UK and Canada) was up 32% to £611.1m (2014 H1: £462.1m) and underlying operating profit was steady at £19.3m (2014 H1: £19.2m).
The underlying operating margin reduced to 3.2%, from 4.2% last time. The board said this was “consistent with our long-standing guidance that the margin in this segment would trend back towards a more normal level of between 2.5% and 3.0% as the temporary benefits to margins, due to rescaling of our UK construction business, decline. However, underlying operating profit was more than maintained because the effect of the lower underlying operating margin was more than offset by revenue growth.”
After picking up lots of orders in 2014, a slow-down in new business booked in the first half across the group was attributed to the usual impact of a general election. The value of new orders and probable orders in the frist half totalled £1.0bn, compared with £3.2bn in the first half of 2014. The order book (including probable orders) was worth £17.1bn at 30th June 2015, down from £18.6bn at the start of the year but the pipeline of contract opportunities increased to £40.5bn, from £39.2bn.
Chairman Philip Green commented: "I am pleased to report that Carillion has continued to perform in line with expectations, which reflects the actions we took during the economic downturn to position our businesses in markets where we can now achieve revenue growth, consistent with our targets for margins and cash flow. We have also made good progress with mobilising a number of major new contracts won in 2014. Therefore, with a strong order book, a growing pipeline of contract opportunities and the prospect of market conditions continuing to improve, our expectations for 2015 and the medium term remain unchanged."