“Robust performance” from Carillion as lucrative Middle East orders announced
WOLVERHAMPTON support services giant Carillion has been named as preferred bidder for £210m of new work in the Middle East.
The contracts are for projects in Oman, Abu Dhabi and Saudi Arabia.
The firm has made a good start to 2013, winning new orders and probable orders in the first seven weeks of the year that are expected to be worth some £650m.
In support services it has won orders and probable orders worth some £280m. This includes facilities management contracts in the UK and Canada, a further highways maintenance contract in Canada and energy company obligation (ECO) contracts in the UK. These ECO contracts are initially worth some £75m but have significant potential for growth.
The Middle East contracts announcement came on the day that Carillion revlealed its annual results for the year ended December 31.
The firm suggests these show robust performance in difficult trading conditions although revenue is down by 13% from £5.1bn in 2011 to £4.4bn.
Profit before tax, however, is up by 26% from £142.8m in 2011 to £179.5m.
Carillion said revenue is down primarily due to the planned rescaling of its UK construction business whereas underlying profit from operations is up as a result of an improvement in its total operating margin.
The firm also points out it has a strong balance sheet.
Net borrowing of £155.8m (2011: £50.7m) reflects the expected outflow of working capital, primarily due to the rescaling of UK construction, and the acquisition of the Bouchier Group in Canada.
It has more than £1 bn of committed borrowing facilities and private placement funding and total order book plus probable orders of £18.1bn (2011: £19.1bn) and a pipeline of contract opportunities worth some £35.2bn (2011: £33.1bn).
The firm’s chairman Philip Rogerson said: “Carillion has continued to deliver a robust performance, with underlying earnings per share slightly ahead of the market consensus forecast.
“Having rescaled our UK construction activities, we have also further improved the risk profile and the overall quality of our business.
“Looking forward, we expect market conditions to remain challenging in 2013.
“However, with a resilient business model, a strong order book and a substantial pipeline of contract opportunities, the group remains well positioned to achieve its targets of delivering annual growth in support services and of doubling annual revenues in the Middle East and in Canada, in each case to around £1bn, in the five-year period from 2010 to 2015.”
