Revenues up 10% at Carillion
STRONG growth in its support services operation has led to a 10% first half revenue boost for construction and facilities management group Carillion.
The Wolverhampton-based group has cheered shareholders by saying it expects the trend to continue during the second half.
Carillion chairman Philip Green said “the group’s first-half results are in line with our expectations”.
He added: “New order intake in the first half of the year has been strong and continues to reflect the success of our strategy and strength of our business model. Overall, we remain on track to make further progress in 2016.”
Total first-half revenue increased to £2.5bn (H1 2015: £2.3bn). The first-half operating margin reduced to 4.9% (2015: 5.1%) due to profit levels from equity sales in Public Private Partnership projects being lower than in the first half of 2015 and the benefit to profit from the reorganisation of labour facilities in Oman during H1 last year not being repeated.
However, it said strong revenue growth more than offset the reduction in underlying operating margin and underlying operating profit increased to £121.3m (H1 2015: £115.3m), driven by a 30% increase in the contribution from support services, which now accounts for around 60% of the group’s underlying operating profit.
Underlying profit from operations was broadly unchanged at £112.7m (H1 2015: £112.5m), as was underlying pre-tax profit of £84.5m (H1 2015: £84.5m), after an increase in joint ventures net financial expense to £6.9m (H1 2015: £1.3m), a small increase in the group’s underlying net financial expense to £28.2m (H1 2015: £28.0m) and a joint ventures taxation charge of £1.7m (H1 2015: £1.5m).
New order intake in the first half was strong, with new orders and probable orders worth around £2.5bn (H1 2015: £1.0bn). Consequently, the total value of the group’s order book plus probable orders remained stable at £17.4bn as of June 30, 2016.
Full-year revenue visibility at half-year increased to 98% (2015: 96%), up from 84% at the end of 2015.
Carillion has also announced that former Group Financial Controller Zafar Khan has been appointed as Group Finance Director in succession to Richard Adam, who is retiring. The appointment takes effect from December.
