Carillion signs extension of BT broadband contract in a deal that could be worth £500m
WOLVERHAMPTON construction and services giant Carillion has signed an extension contract with BT for broadband delivery that is potentially worth up to £500m.
A Carillion telent (60:40) joint venture has been appointed as a preferred supplier by BT to support the delivery of its broadband delivery UK (BDUK) programme to 33 local authority regions.
Carillion telent will work with BT on the BDUK Programme for the next three and a half years. The appointment has the potential to be worth up to £500m to the joint venture over this term, subject to performance.
The BDUK programme will deliver further improvements to the UK’s broadband network, with particular emphasis on making superfast broadband available to rural communities.
BT has secured contracts with local authorities across the UK to deliver broadband access in their areas. Carillion telent will deliver civil engineering, cabling, poling and other infrastructure services.
Carillion chief executive Richard Howson said: “We are delighted to have extended our relationship with BT with this contract for BDUK. I believe this reflects our commitment to providing high-quality, value for money services and to building strong, long-term relationships with our customers.
“We look forward to working with BT to deliver BDUK, which will make a vitally important contribution to improving the UK’s broadband network and creating real benefits for the UK economy.”
The Carillion telent joint venture has been BT’s preferred infrastructure services supplier since 2010.
Meanwhile, in a 2013 pre-close trading statement issued this morning, Carillion said trading remains broadly in line with expectations.
It said net debt is reducing as expected. At the year-end, it expects net debt to fall to around £250m, compared with £270m at 30 June 2013
Carillion expects an improved working capital performance in the second half.
New order intake is strong, Carillion suggests, with the total value of orders plus probable orders remaining at approximately £18bn while the pipeline of contract opportunities also continues to be strong at £37bn.
Carillion said total revenue in 2013 will be lower than in 2012, primarily due to the planned rescaling of its UK construction activities.
The firm has renewed its main revolving credit facility. The new facility, which was oversubscribed, has been extended from March 2016 to March 2018. As part of the renewal process, the National Bank of Abu Dhabi became one of its syndicate banks and Carillion suggests this reflects its strength and prospects for growth in the Middle East.
Carillion said Philip Green, its senior non-executive director, will succeed Philip Rogerson as chairman when Rogerson retires from the board at the company’s AGM in May.
