TOTAL 2010 revenue at support services company Carillion is expected to be lower than last year, the company warned today.
The firm said in a pre-close trading update that, in line with previous guidance, the fall would reflect the sale of non-core business and Public Private Partnership equity investments, the reduction in UK construction and an ongoing focus on contract selectivity and financial discipline.
The Wolverhampton-based company added, however, that it expected to see an improvement in the group’s overall operating margin in 2010, which was 3.8% last year.
The pre-close trading statement is for the 12 months to December 31, 2010, and comes ahead of Carillion announcing its preliminary results on March 2, 2011.
The company is managing the delivery of the new £193m Library of Birmingham, the £370m Building Schools for the Future programme in Wolverhampton and the £50m improvements to Chiltern Railway.
The statement said: “The group continues to perform well, despite tough market conditions in the UK, and expects to deliver continuing good growth in underlying profit before tax and underlying earnings per share.
“Growth in profit is therefore expected to more than offset the effects of selling non-core businesses and equity investments in public private partnership projects in 2009, which together contributed some £17m of underlying profit before tax.
“We are well-positioned to make further progress in 2011 and, over the medium term, to target strong international growth alongside substantial growth in UK support services.
“The results of the Spending Review were in line with our expectations and are already reflected in our guidance to the market.
“Our discussions with the UK Government in respect of existing contracts with Central Government customers, under its Supplier Engagement Programme, are progressing well and we do not expect the outcome of these discussions to have a material effect on market guidance.”
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