Selective approach to contracts keeps Carillion on track

International firm says growth prospects remain unchanged for the medium-term, with a strong order book and substantial pipeline

Carillion worker
Carillion worker

Integrated support services company, Carillion, which took over Newcastle’s Warm Front business Eaga in 2011, says trading has remained in line with expectations since the announcement of its half-year results on August 13.

The group, which has a Gosforth office, increased pre-tax profits by 5% to £67.5m during the first half of its financial year, despite a drop in revenues.

In a trading update for the third quarter, it said: “Following our strong work winning performance in the first half of the year, during which we won new orders and probable orders worth approximately £3.2 billion, the successful mobilisation of new contracts, particularly in support services, will continue to be a major focus for the Group during the balance of 2014 and in the first half of 2015.

“Importantly, in winning new work we have maintained our highly selective approach to the contracts for which we bid and therefore the group continues to target revenue growth in 2014 at an operating margin in line with expectations.

“The group also continues to have a robust balance sheet with strong cash flow and net borrowing reducing in line with expectations.

“Our cash flow performance continues to follow the profile we have consistently forecast, namely that following the completion of the planned rescaling of our UK construction activities the Group would return to positive net cash generation, as evidenced by our first-half results.

“With trading in line with expectations, a strong order book and a substantial pipeline of contract opportunities, the board’s expectations for 2014 and the group’s prospects for growth over the medium term, remain unchanged.”

Carillion employs around 40,000 in total and operates across the UK, the Middle East and Canada.

The group consists of four business segments: support services, Public Private Partnership projects, Middle East construction services, and construction services, excluding the Middle East.

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