7th May 2014 12:15
LONDON (Alliance News) - Struggling construction services company Carillion PLC Wednesday said it is trading in line with expectations this year, and expects to resume revenue growth in 2014, including the resumption of revenue growth in UK construction in the full year.
But Carillion warned that first half revenue is likely to be slightly lower than in the first half of 2013, due to the rescaling of its UK construction activities.
The construction services company was hit hard by the financial crisis and ensuing downturn as its construction markets slowed dramatically. In response, it decided to focus on winning public-private partnership contracts, where the financing risk is shared with UK government, and on winning support services clients. Like many of its peers, it also decided to focus on protecting its margins and paying down debt.
As a result the company posted a drop in profit for 2013 to GBP110.6 million, down from GBP164.8 million in 2012, as revenue fell 6.8% to GBP4.1 billion, from GBP4.4 billion a year earlier.
In an interim management statement Wednesday, the company said its public-private partnership projects division has performed in line with its expectations during the year, but as previously indicated, the first-half and full-year contributions to group profit from the division will be lower than in 2013 because it plans to sell fewer investments in 2014.
Carillion said it expects to deliver cash-backed profit in 2014 and to return to positive net cash generation, with consequent reduction in net borrowing at the year-end.
At the half-year, net borrowing is expected to increase, compared with the position at December 31, it said, primarily because payment of the final dividend in respect of 2013 will be made in June 2014.
During the recent period, the company signed a number of contracts including two schemes in the Middle East.
Recently its joint-venture business in the United Arab Emirates has been awarded a GBP61 million contract by the Dubai World Trade Centre to develop the first phase of the Dubai Trade Centre District.
The joint venture, Al Futtaim Carillion, will develop an eight-storey office building and a 588-room business and tourism hotel at the 146,000 square metre site which is situated between the current Dubai International Convention and Exhibition Centre and Emirates Towers.
Carillion shares were quoted at 360.10 pence Wednesday, up 1.70 pence or 0.5%.
http://www.lse.co.uk/AllNews.asp?code=oj4xpnss&headline=Carillion_Sees_Profits_Fall_33_After_UK_Restructure_Wins_Contracts
By Anthony Tshibangu; [email protected];
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