Defence contracts help Carillion to withstand its own bombardment
Crisis-hit construction group Carillion has revealed two contract wins for a joint venture as it looks to respond to last week’s turmoil.
The contracts with the Defence Infrastructure Organisation (DIO) have a core value of £158m over five years, with the potential to double its value.
The announcement follows yesterday’s HS2 agreement, when its CEK joint venture partnership was named as the successful bidder for two HS2 contracts worth a total of £1.34bn.
The markets responded positively, with its share price up by nearly one-fifth – although its closing price of 67p is still a long way below its July 7th close of 192p.
The Wolverhampton-based group issued a profit warning last Monday and chief executive Richard Howson departed, while it launched a major review of the business.
Carillion’s interim chief executive Keith Cochrane said: “The DIO is a key support services customer with whom we have built a long-term successful partnership.
“We are committed to building on this relationship and on our position as a leading supplier to the DIO by using our core skills and capabilities to deliver high-quality services.”
The contracts announced today are for the HESTIA North, and Scotland and Northern Ireland Soft Facilities Management Multi Activity Contracts. They follow on from the award of the South East and London contract by DIO to the joint venture earlier this year.
The Carillion Joint Venture will deliver soft facilities management services, including catering, retail and leisure, together with hotel and mess services.
The North contract will employ around 1,500 people, covering 130 military establishments and will go live at the beginning of January 2018.
The Scotland and Northern Ireland Region contract will go live at the beginning of November 2017 and covers a further 103 military establishments and will employ around 1,030 people.
