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Support services more than compensates for Carillion’s flat construction year

7 Dec 16 Carillion’s construction business has seen little change on 2015 this year but growth in support services means that its overall revenue and profits will be up in 2016.

Support services, including catering and school dinners, now accounts for two-thirds of Carillion's profits
Support services, including catering and school dinners, now accounts for two-thirds of Carillion's profits

Carillion said that it expects two-third of its operating profit in 2016 to come from support services. It also said that it expects the proportion of total revenue and operating profit from support services activities to continue increasing.

The total order book plus probable orders is expected to be £16bn at the end of December, down from £17.4bn a year ago. Of this, £2.6bn is in construction.

Carillion will publish its 2016 financial results on 1st March 2017, but in a trading update today it said: “Our performance continues to be led by revenue growth and a strong margin in our support services business segment, which is expected to contribute around two thirds of the group's total operating profit (2015: 57%), with this increase more than offsetting the expected reductions in the contributions to underlying operating profit from the sale of equity in public private partnership (PPP) projects and from Middle East construction services.  The contribution from construction services (excluding the Middle East) is expected to be broadly similar to that in 2015.”

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