Construction drives Carillion profits
22 August 2012
Contractor Carillion has bucked the trend by reporting strong growth in its construction division.
The firm’s first-half results revealed its overall underlying operating profit rose by 8% to £95.6m, thanks largely to a 69% surge in profits at its construction services division. Its support services operations also grew by 7% to £48.8m.However, Carillion’s Middle East construction division fell by 27% during the first six months of the year, partly due to “the timing of project awards in the Middle East”, the firm said.
Meanwhile profit from its PPP projects also fell by 17%. The directors’ valuation of the firm’s PPP portfolio during the period stood at £163m, down just £1m from December 2011, despite £19.3m of equity sales.
Overall revenue was also down during the period, which the company put down to “the continued re-scaling of UK construction”.
Despite the slowing construction market, Carillion posted a record pipeline of contract opportunities of £35.6bn, up from £33.1bn in December.
“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,” said chairman Philip Rogerson.
Many construction firms have seen their support services divisions drive growth during the first half of this year, with construction operations largely slowing down due to a lack of projects.
