"Carillion has made a solid start to the year, with progress in line with the board's expectations,” Mr Rogerson said.
“In construction services (excluding the Middle East), we continue to benefit from the decision we took in 2010 to re-scale our UK business to align it with a shrinking market, by being very selective in terms of the contracts for which we bid. We expect to complete this re-scaling by the end of 2012, with the operating margin remaining strong as a result of our selective approach.
“Carillion continues to have a strong balance sheet and we expect to maintain our track record of delivering cash-backed profit, after adjusting for the effect of completing the re-scaling of UK construction, which, as previously indicated, will result in an outflow of working capital in 2012.”
Mr Rogerson said that, overall, market conditions “remain challenging, but we continue to have a strong order book and a record pipeline of contract opportunities”.
He added: “Encouragingly, we are beginning to see the award of some of the larger, more complex local authority support services contracts that are designed to help these authorities deliver savings, while maintaining good quality, value-for-money services. In April 2012, we were delighted to be selected by Oxfordshire County Council to provide property and facilities management services that are expected to be worth up to £700m over the initial 10-year contract period, with an option for the contract to be extended for a further 10 years, subject to performance.”
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