26th Aug 2015 06:40
LONDON (Alliance News) - Construction and support services company Carillion PLC on Wednesday posted flat pretax profit for the first half despite a surge in revenue and said its order intake in the half was sharply lower due to the slowdown in contract awards ahead of the UK's General Election.
The FTSE 250 company said its pretax profit for the six months to the end of June was GBP67.5 million, exactly flat against a year earlier, despite revenue in the half rising 21% to GBP2.26 billion from GBP1.87 billion. Carillion blamed the costs of mobilising new contracts and lower margins in construction services for the failure of profit to keep pace with revenue.
The revenue growth was driven by the strong order intake the company secured in 2014, but in the first half of 2015, its orders plus probable orders fell to GBP1.0 billion from GBP3.2 billion a year earlier, blamed by the company on the anticipated pause in public sector contract awards ahead of the election.
Total secure orders plus probable orders on Carillion's books fell to GBP17.1 billion at the end of June, down from GBP18.6 billion a year earlier, though the group's revenue visibility for the full year is at 96%, an improvement on the 93% visibility it had a year earlier.
Carillion said it will pay an interim dividend of 5.7 pence per share, compared to 5.6p per share a year earlier.
The company said it has trading in line with its expectations in the half and still anticipates hitting its revenue, profit and earnings growth targets for the full year.
"I am pleased to report that Carillion has continued to perform in line with expectations, which reflects the actions we took during the economic downturn to position our businesses in markets where we can now achieve revenue growth, consistent with our targets for margins and cash flow," said Philip Green, Carillion's chairman.
"We have also made good progress with mobilising a number of major new contracts won in 2014. Therefore, with a strong order book, a growing pipeline of contract opportunities and the prospect of market conditions continuing to improve, our expectations for 2015 and the medium term remain unchanged," Green added.
By Sam Unsted; [email protected]; @SamUAtAlliance
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