£150m contract win for Carillion but revenue down and profit slumps
WOLVERHAMPTON construction and services giant Carillion has announced a £150m contract win in the Middle East on the same day its annual results showed both revenue and profit were down – profit by 33%.
The Middle East contract is for Carillion’s joint venture business in the United Arab Emirates, Al Futtaim Carillion.
Awarded by Meraas, the contract is to build The Avenue Phase 2 City Walk development in Dubai.
The contract includes the construction, commissioning, testing and completion of the second phase of a high-quality family entertainment and retail development of over one million square feet in the Jumeirah area of Dubai. Al Futtaim Carillion completed the first phase of this major development in 2013.
Construction will commence immediately with completion in the second quarter of 2015.
But the contract award comes against a backdrop of disappointing results for Carillion for the year ended December 31. The group saw revenue decline by 7% to £4.1bn and profit before tax shrink by a hefty 33% to £110.6m.
But the group said the results were in line with expectations and were largely due to the rescaling of its UK construction arm.
Its underlying operating margin remained constant at 5.6%.
Carillion chairman Philip Rogerson said: “In 2013, Carillion has continued to respond decisively to challenging market conditions, including completing the rescaling of its UK construction activities and the restructuring of its energy services business, which are now aligned in size to their respective markets, while continuing to develop and strengthen its positions in new and existing markets that offer good opportunities for growth.
“Overall, we expect market conditions to remain challenging in 2014, but with a strong order book, good revenue visibility and substantial pipeline of contract opportunities the Group is now well positioned for the future.”
