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Fri June 18 2021

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Rescaling reduces Carillion revenue but profits rise

22 Aug 13 Carillion's half-year results show an 8% rise in underlying profits to £92.3m even though revenue and profits from UK construction operations have fallen.

Philip Rogerson said that the performance is in line with expectations.
Philip Rogerson said that the performance is in line with expectations.

The reduction in total group first-half revenue by 9% to £1,964.6m was driven primarily by the planned rescaling of UK construction activities. The company believes this is now largely complete, opening the way for growth in the second half of the year.

Construction services outside the Middle East reported revenue down 20% to £503.8m from £631.6m and underlying operating profit down 27% to £19m.

Rescaling of UK construction activities has been achieved through more selective choice of contracts. Activities increasingly focus around integrated services for PPP projects and support services customers, and projects for other customers with whom Carillion has long-term partnerships.

The group's underlying operating margin rose 19% to 5.1%. The margin in construction reduced to 3.8% from 4.1% but the full-year margin target of about 4% for the sector remains unchanged.

First-half orders and probable orders were up 32% to £2.9bn, with recent wins including the £335m Royal Liverpool Hospital PPP contractand the £400m first-phase development at Battersea Power Station.

Carillion chairman Philip Rogerson said: "Carillion's first-half performance was in line with the board's expectations. Despite market conditions remaining challenging, new order intake was strong, with £2.9 billion of new orders and probable orders in the first half of the year, which enabled the group to increase the total value of its order book plus probable orders to £18.4 billion. This, together with a strong pipeline of contract opportunities, continues to support the group's 2013 and medium term targets."

The pipeline of contract opportunities is worth £37.5bn, said the company.

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