黑洞社区

Carillion鈥檚 profit before tax jumped 68% in the first half of the year driven by strong performance of its UK and Canadian construction businesses.

In the contractors鈥� first half results, released this morning, profit before tax was 拢64m compared with 拢38m in the same period last year, although revenue fell 12% from 拢2.45bn to 拢2.16bn.

The construction division outside of the Middle East, which comprises businesses in the UK and Canada and is being downsized, achieved operating margins of 4.1% compared with 1.6% last year thanks to a 鈥渉ighly selective鈥� bidding approach.

This saw the division raise operating profit by 69% to 拢26m, despite revenue falling by a third to 拢632m.

However, the firm鈥檚 construction division in the Middle East fared less well with operating profit falling 27% to 拢14m and revenue falling a fifth to 拢202m.

Chief executive Richard Howson told 黑洞社区 that Carillion鈥檚 鈥渞esilient business model鈥� and refusal to chase volume had helped it achieve the results.

He emphasized that 92% of the revenue for 2012 had been achieved already through secure and probable orders.

Carillion reported 拢2.2bn of new and probable orders won in the first half, with total orders and probable orders standing at 拢18.3bn.

Howson said the firm had developed a business model over the past decade which meant it could offer a 鈥渧ery high level of competence in terms of design and construction, ability to privately finance schemes and then offer asset management over 25-30 years in the UK, Canada and the Middle East.鈥�

He added: 鈥淲e have not chased volume so we have not had to compromise overly on margins. This has resulted in low bid costs 鈥� we鈥檝e had a rigorous approach on cost over the past three to four years.鈥�

He said significant contract wins in recent months included a 10-year property and facilities-management contract for Oxfordshire council that could be worth up to 拢700m over its lifespan and was won in April.

Carillion is now chasing three to five similar contracts in the public sector.

Carillion chairman, Philip Rogerson, said: 鈥淐arillion delivered a robust first-half performance, in line with the board鈥檚 expectations, despite market conditions remaining challenging. Given the strength of our business model, order book and pipeline of contract opportunities, we remain on track to deliver full-year results in line with expectations and to achieve our medium-term targets, namely to deliver growth in support services and to double our annual revenues in the Middle East and in Canada in the five-year period to 2015, in each case to around 拢1bn.鈥�