2nd Jul 2014 07:47
LONDON (Alliance News) - Struggling construction company Carillion PLC Wednesday said its performance in the first half was in line with expectations, and it remains on track to resume revenue growth in the full year, despite an expected dip in first-half revenue due to the rescaling of its UK construction activities.
The 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 the 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.
Earlier this year Carillion posted a drop in profit for 2013 to GBP110.6 million from GBP164.8 million in 2012, as revenue fell 6.8% to GBP4.1 billion from GBP4.4 billion a year earlier.
However, the company Wednesday said it continues to target growth in support services and Middle East construction services as it attempts to resume revenue growth in the full year.
It said operating margins are expected to increase in the first half as it continues to be selective regarding the contracts it bids for.
Carillion also said the contribution to group profit from its investments in public-private partnership projects remains in line with its expectations but, as it had previously announced, will be lower than in 2014. The company said it will sell fewer investments in 2014.
In a separate note Wednesday, Carillion said it has been selected as the preferred bider to expand Liverpool Football Club's Main Stand and the associated public realm improvements. The upgrade is expected to take around 20 months to complete with construction costs worth in the region of GBP75 million.
The deal is a welcome boost to the company and if planning permission is granted, the proposals would see the capacity of a new Main Stand rise by around 8,300, taking the overall capacity of Anfield to around 54,000.
Carillion shares were quoted up 1.5% at 338.30 pence Wednesday morning.
By Anthony Tshibangu; [email protected]; @AnthonyAllNews
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