Carillion boosted by new orders and Goverment MoU

BLACK Country based civil engineering and support services group Carillion has said it is making a good start to 2011 with a new Memorandum of Understanding signed with the Coalition Government and new probable orders worth around £350m.

In addition, the Wolverhampton firm said it expected to report continuing good growth for 2010 with strong pre-tax profits and earnings per share. Year-end cash is expected to be well over £100m.

The MoU with the Government centres on the Supplier Engagement Programme. The agreement identifies how Carillion can work together with the coalition to help re-engineer procurement and service delivery, including changing the scale and scope of outsourced services across a number of our existing contracts.  

“Following these constructive discussions, Carillion believes that the opportunities to work with both central and local government to deliver greater efficiencies through outsourcing services remain very strong. The outcome of these discussions has no material effect on Carillion’s current market guidance,” said the firm in a statement.        
 
The company said its support services operation had recently secured new and probable orders worth in the region of £190m.

These include a £25m, five-year contract to provide a fully integrated range of hard and soft facilities management services to the Land Registry estate of 37 properties. In addition, a Carillion Joint Venture has won support services contracts worth around £80m over the next five years, including contracts to provide hard and soft facilities management services for Dow and property management services for Enexis.  
 
BAA has also appointed Carillion as one of three contractors which together will provide mechanical and electrical engineering services and fabric maintenance at Heathrow Airport. The deal is worth up to £75m over three years.

Carillion is also in single-point negotiation on further integrated facilities managements contracts, notably with customers in the financial services sector, that are expected to generate over £100m over the next five years.   
 
John McDonough, Group Chief Executive, said: “We have made a positive start to 2011, following our strong performance in 2010, for which we expect to report good profit and earnings growth, and year-end net cash of well over £100m.  New order intake remains healthy and we have secured new orders plus probable orders worth some £350m.”  

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