The first-half revenue of £2,156.8m was lower than the £2,453.5m achieved in the first half of 2011. Underlying profit increased by 8% to £80.7m from £74.4m as a result of an increase in total operating margin to 4.1% from last year’s 3.3%. Carillion said that this is in line with a focus on cost management and selective approach to the contracts for which its bids.
The drop in revenue was primarily due to the planned re-scaling of UK construction activities and the timing of project awards in the Middle East. Middle East revenue is expected to be second-half weighted, partially offset by growth in support services. Revenue in the full year is also expected to be lower than in 2011, as the effect of re-scaling UK construction to align with the smaller market will more than offset growth in support services.
"Carillion delivered a robust first-half performance, in line with the Board's expectations, despite market conditions remaining challenging,” said Carillion chairman Philip Rogerson. “Given the strength of our business model, order book and pipeline of contract opportunities, we remain on track to deliver full-year results in line with expectations and to achieve our medium-term targets, namely to deliver growth in support services and to double our annual revenues in the Middle East and in Canada in the five-year period to 2015, in each case to around £1 billion."
Underlying profit before tax increased by 1% to £73.1m, after a £5.7m increase in the group's net financial expense, £3.3m of which related to an increase in the group's pension scheme interest charge.