黑洞社区

Carillion is lining up joint venture bids for up to two further UK contracting jobs with a major Chinese contractor.

Carillion is already in joint venture with Beijing Construction Engineering Group (BCEG) on Manchester鈥檚 mixed-use 拢800m Airport City scheme (pictured) and this week Carillion chief executive Richard Howson told 黑洞社区 the firm was considering teaming up with the Chinese contractor on other projects.

鈥淲e鈥檙e considering one or two projects [with BCEG] off the back of [Airport City]鈥�, Howson said.

鈥淲e鈥檙e looking at a couple of things with them. Part of our long-term model is to develop our relationships with key partners.鈥�

An influx of investment in UK property from China in recent years 鈥� including China鈥檚 biggest bank, Commercial Bank of China, investing 拢650m in Manchester Airport City 鈥� has prompted speculation Chinese construction firms could follow them into the market.

BCEG is thought to be the first Chinese main contractor to enter the market, although Chinese specialist cladding firms Far East Facade and Yuanda are already established in the UK.

Howson revealed its plans with BCEG as Carillion posted full-year results for the year to 31 December 2013, with group revenue dropping 7% to 拢4.1bn, down from 拢4.4bn the previous year.

The firm posted underlying pre-tax profit fall of 拢175m, down 13% from 拢220m the previous year.

However, when taking into account the 拢43m hit it took after restructuring its energy services business last year, pre-tax profit fell 33% to 拢111m.

Carillion鈥檚 construction business in the UK and Canada shrank 17% to 拢1.1bn, down from 拢1.3bn, while underlying operating profit 鈥� after stripping out the 拢43m in restructuring costs 鈥� was down 39% to 拢44.4m.

The contractor said it had now completed the downscaling of its construction business to 鈥渁lign鈥� it to the reduced size of the market.

Howson said the construction division would 鈥渃ertainly start to grow now鈥� and defended the timing of the downscaling, saying its strategy was to be 鈥渋ncredibly selective鈥� on bids, helping it achieve a 4.2% margin for the period, which he described as 鈥渂est in class鈥�.

During the period Carillion won the 拢400m first residential phase of the redevelopment of Battersea Power Station and Howson said the firm 鈥渕ay鈥� bid for later phases.

Carillion also announced contract wins worth a combined 拢520m 鈥� a 拢150m leisure and retail development in Dubai and support services deals for Canada Natural Resources, Royal Bank of Scotland and Arqiva, worth 拢370m between them.

Carillion won 拢4.9bn of additional work in 2013, topping up its order book to 拢18bn, unchanged from the previous year.