Contractor makes disclosure in half-year results this morning

Carillion expects to pay over 拢10m compensating victims of the blacklisting scandal this year.

In half-year results posted this morning, the contractor made a 拢10.5m writedown it said represented what it expects to pay in compensation to blacklisted workers in 2016.

Carillion - alongside seven other contractors involved in blacklisting - .

The legal action followed the 2009 discovery of a database of over 3,000 construction workers kept by The Consulting Association - since shut down - to vet new recruits on behalf of its then member contractors.

Explaining today鈥檚 拢10.5m writedown, Carillion said: 鈥淸This] represents the compensation and associated costs that we expect to pay under The Construction Workers Compensation Scheme set up by eight UK companies for workers who have been impacted by use of the database vetting system operated by The Consulting Association.鈥�

The writedown contributed to an 18% drop in Carillion鈥檚 half-year operating profit for the first six months of 2016 to 拢73.6m, down from 拢90.2m the previous year.

The firm鈥檚 UK and Canadian contracting businesses - which are reported together - posted an 18% drop in underlying operating profit to 拢15.2m, down from 拢18.5m. However, revenue increased 12% to 拢682.7m, up from 拢607.7m.

Carillion said underlying margins in UK contracting dipped slightly to 3%, down from 3.2%, but this still puts the firm ahead of most of its peers.

Overall revenue increased to 拢2.49bn, up from 拢2.26bn.

A net gain on finance costs meant the firm posted a 24% increase in pre-tax profit to 拢83.9m, up from 拢67.5m.

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