Carillion subsidiary announced as preferred bidder for £120m project
A SUBSIDIARY of Wolverhampton-based construction and support services group, Carillion has been selected as the preferred bidder for a power transmission contract worth £120m.
Rokstad, a division of Carillion Canada, has been selected by Manitoba Hydro as the preferred provider for the next phase of its Bipole lll high-voltage transmission line project.
The project involves clearing rights of way, the installation of access roads, foundations and anchors, the assembly of towers and the stringing of cables for three packages of the Bipole lll project, which includes 1,384 km of transmission lines and two converter stations, starting at Keewatinohk in Northern Manitoba and ending at Sandy Bay Ojiway First Nation in Southern Manitoba. When the whole Bipole lll project is completed, it will deliver renewable energy to Southern Manitoba and to the United States.
Carillion said it expected to agree final terms and achieve contract signature shortly to enable work to begin before the end of the year, with completion scheduled for 2018.
Carillion chief executive, Richard Howson, said: “We are delighted to have been selected for this important project, which further demonstrates the quality and strength of Rokstad’s offering and the success of our strategy of expanding our infrastructure services activities in Canada into the power transmission and distribution market, with the acquisition of Rokstad in 2014.”
The announcement coincided with a full year trading update by the parent group, in which it said performance was meeting expectations with strong growth expected to be reflected in total revenue and increased operating profit.
It said the performance continued to he led by revenue growth and a strong margin in support services.
The group has also forecast that net borrowing is expected to reduce from the half-year level.
New orders plus probable orders in 2016 are expected to reach £4.5bn, with total orders plus probable orders of approximately £16bn (December 2015: £17.4bn) by the year end.
It is currently forecasting around 70% revenue visibility for 2017, down on the current year – which was listed as 84% visible in December 2015.
It said the pipeline of specific contract opportunities was broadly unchanged at over £41bn.
“Our performance in 2016 continues to reflect the group’s strategy for sustainable profitable growth through investing in our people, building long-term trusted partnerships, transferring knowledge and skills to new and existing markets in order to expand our support services and infrastructure activities and providing a selective, high-quality construction capability,” it said.
“We expect total operating profit to increase as a result of strong revenue growth at a slightly lower operating margin. 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.”
Full year results for 2016 are expected to be published on March 1, 2017.
