5th Sep 2007 07:01
Carillion PLC05 September 2007 EMBARGO: NOT FOR PUBLICATION OR BROADCASTBEFORE 7.00am ON WEDNESDAY 5 SEPTEMBER 2007 CARILLION PLC Interim Results for the six months ended 30 June 2007 10% growth in underlying earnings per share Underlying results(1) • Total revenue up 12% to £1,928.6m (2006: £1,717.6m)(2) • Underlying profit before taxation up 28% to £34.3m (2006: £26.9m)(2) • Underlying earnings per share from continuing operations up 10% to 9.6p (2006: 8.7p) • Underlying earnings per share from continuing and discontinued operations up 15% to 9.1p (2006: 7.9p) Reported results • Profit before taxation of £19.5m (2006: £13.9m)(2) • Basic earnings per share from continuing and discontinued operations of 5.4p (2006: 3.5p) • Proposed interim dividend up 13% to 3.5p (2006: 3.1p) • Net borrowings at 30 June 2007 of £139.7m (2006: £118.4m) Strategic highlights • Successful integration of Mowlem earlier than expected - on track to deliver £26m per year of integration savings • Strong growth in support services - revenue up 26% • Construction margins improving • £15.8bn order book - pipeline of probable orders increased to £2.0bn • Opportunities to double Middle East revenue, from the 2006 level of £274.3m, over the next five years • Overall outlook in main markets remains positive (1) After Joint Ventures taxation of £4.1m (2006: £4.9m) and before intangible amortisation, goodwill impairment, restructuring costs and non-operating items (see note 3) (2) Continuing operations CARILLION PLC - ANNOUNCEMENT OF INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2007 Philip Rogerson, Chairman, commented: "The successful integration of the Mowlem business has contributed to a strongfirst half performance. With a positive overall outlook in our key markets, weexpect to make further good progress in the second half of 2007 and delivermaterially enhanced earnings in the full year". For further information contact: Richard Adam, Group Finance Director tel: +44 (0) 1902 422431John Denning, Group Corporate Affairs Director tel: +44 (0) 1902 316426 5 September 2007 Notes to Editors: This announcement is also available on Carillion's website: www.carillionplc.com Carillion plc is one of the UK's leading support services, construction andPublic Private Partnership project companies. The Group has annual revenue of around £4bn and employs over 50,000 people. The Group operates across the UK, in the Middle East and in Canada and theCaribbean. In the UK, the Group has eight principal market sectors - Defence, Education,Health, Building, Facilities Management and Services, Roads, Rail and CivilEngineering. In the Middle East, the Group's two principal market sectors are Constructionand Facilities Management. In Canada and the Caribbean the Group's main sectors are Health, RoadsMaintenance and Construction. The Group is a leader in Public Private Partnership projects, particularly inthe Defence, Education and Health sectors in the UK and in the Health sector inCanada. This, and other news releases relating to the Group, can be found atwww.carillionplc.com. Photographs: High resolution photographs are available free of charge to the media atwww.newscast.co.uk telephone 0208 886 5895. Key financial figures 2007 2006 Change--------------------------------------------------------------------------------Income statement(1) Total revenue £m 1,928.6 1,717.6 +12%Support services underlying operatingmargin Percentage 2.9 2.6 n/aConstruction services underlyingoperating margin Percentage 1.9 0.8 n/aUnderlying profit from operations(2) £m 35.9 22.1 +62%Underlying profit before taxation(2) £m 34.3 26.9 +28%Profit before taxation £m 19.5 13.9 +40%Underlying earnings per share -continuing operations(2) Pence 9.6 8.7 +10%Underlying earnings per share -continuing and discontinued operations(2) Pence 9.1 7.9 +15%Basic earnings per share - continuingand discontinued operations Pence 5.4 3.5 +54% Dividends Proposed dividend per share Pence 3.5 3.1 +13%Underlying proposed dividend cover -continuing operations(2) Times 2.7 2.8 n/aBasic proposed dividend cover -continuing and discontinued operations Times 1.5 1.1 n/a Cash flow statement(1) Cash generated from operations beforepension deficit recovery payments andrestructuring costs and afterdividends received from Joint Ventures £m 43.8 85.0 -48%Underlying profit from operations cashconversion Percentage 122.0 384.6 n/aDeficit pension contributions £m 37.2 23.0 +62% Balance sheet Net borrowings £m 139.7 118.4 +18%Net retirement benefit liability £m 26.6 115.3 -77%Net assets £m 476.0 371.8 +28%-------------------------------------------------------------------------------- (1) Continuing operations unless otherwise stated (2) After Joint Ventures taxation of £4.1m (2006: £4.9m) and before intangible amortisation, goodwill impairment, restructuring costs and non-operating items (see note 3) Results The successful integration of the Mowlem business has contributed to a strongfirst half performance. Revenue, including joint ventures, increased by 12 per cent to £1,928.6 million(2006: £1,717.6 million), reflecting a full six months contribution from Mowlem,acquired in February 2006, and continuing organic growth. Underlying profit before tax from continuing activities rose by 28 per cent to£34.3 million (2006: £26.9 million) and underlying earnings per share fromcontinuing activities on the same basis increased by 10 per cent to 9.6 pence(2006: 8.7 pence). Average net debt in the first six months of 2007 was £161.6 million (2006 fullyear post the acquisition of Mowlem: £148.0 million) and the Group ended thefirst half of the year with net borrowings of £139.7 million (2006: £118.4million), which was in line with the Board's expectations as a result of thecontinuing focus on strong cash management. The Group has continued to win substantial new work in its chosen markets andits order book stands at £15.8 billion. It has also maintained a substantialpipeline of probable new orders worth some £2.0 billion (December 2006: £1.6billion). In view of our performance in the first six months of 2007 and prospects for thesecond half, the Board has declared an interim dividend of 3.5 pence per share,an increase of 13 per cent on the dividend paid in respect of the correspondingperiod in 2006. We delivered a strong first half performance and are on course to make furthergood progress in the second half towards achieving our key objectives includingdelivering cost savings at the previously announced running rate of £26 milliona year by the year end. Strategy Mowlem's complementary skills and market strengths in private finance, supportservices and construction have enabled us to create a stronger and moreresilient business, better equipped to accelerate Carillion's strategy forgrowth. CARILLION PLC - ANNOUNCEMENT OF INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE2007 This progress is evident in our order book, which stands at £15.8 billion(December 2006: £16.0 billion), of which £8.6 billion relates to supportservices, £2.4 billion to construction services and £4.8 billion to our equityinvestments in Public Private Partnership (PPP) projects. Our consistent and successful strategy for growth remains unchanged, namely togrow support services and PPP investment activities alongside a strong andselective construction capability and to seek opportunities to provide customerswith integrated solutions that use our wide range of skills and extensiveresources. In addition to revenue growth, we are also focused on improvingmargins, particularly in the businesses acquired with Mowlem and to bring these,over time, into line with those of Carillion. Our strategy continues to be underpinned by living our values in everything wedo. Adopting the highest standards of corporate responsibility not only haspositive impacts on the environment and on the communities in which we operate,but also helps us to deliver our business objectives. Our progress against the seven headline objectives we set for 2007 is summarisedbelow. Key objectives for 2007 What we have achieved Attract, develop and retain We continue to make progress through ourexcellent people by becoming leadership, personal development and employeean employer of choice. engagement programmes, which enable individuals to fulfil their potential and contribute to Carillion's success. Be a recognised leader in the In May 2007, we topped our sector and received adelivery of safety and "Gold" performance ranking in Business in thesustainability Community's 2006 Corporate Responsibility Index. Our Accident Frequency Rate in the first half 2007 of 0.15 (2006: 0.18) ranks with the best in our sector. Deliver revenue growth of a Our first half performance puts us on track tominimum of 5 per cent through achieve this target.exceeding our customers'expectations Deliver Mowlem integration We are making good progress on cost savings andcost savings at a running firmly on course to deliver savings of £26 millionrate of £26 million per annum a year by the end of 2007.by the end of 2007 Generate cash-backed Underlying cash flow represented 122% ofoperating profit underlying operating profit at the half year. Achieve average net debt in Average debt was in line with expectations at thethe full year of around £150 half year and we expect to achieve our objectivemillion for the full year. Deliver materially enhanced A strong first half performance with 10% growth inearnings in 2007 underlying earnings per share(1) means we are on track to achieve this objective. (1) Continuing operations Business performance Total revenue from continuing operations in the first half of 2007 increased by12 per cent to £1,928.6 million (2006: £1,717.6 million) including revenue fromjoint ventures of £317.7 million (2006: £236.6 million). Total underlying operating profit from continuing operations increased by 62 percent to £35.9 million (2006: £22.1 million), including profit from jointventures of £17.5 million (2006: £14.6 million). After a net financing expenseof £1.6 million, underlying profit before tax was £34.3 million, an increase ofnearly 28 per cent (2006: £26.9 million). Underlying earnings per share on thesame measure increased by 10 per cent to 9.6 pence (2006: 8.7 pence). Intangible amortisation amounted to £9.8 million (2006: £7.3 million includinggoodwill impairment), restructuring costs to £5.5 million (2006: £5.7 million)and non-operating income to £0.5 million (2006: £nil) leaving profit before taxof £19.5 million (2006: £13.9 million). After taxation of £1.9 million (2006:£1.6 million), discontinued operations of £1.4 million (2006: £2.2 million) andminority interests of £1.1 million (2006: £1.1 million), profit attributable toCarillion shareholders was £15.1 million (2006: £9.0 million) and basic earningsper share from continuing and discontinued operations were 5.4 pence (2006: 3.5pence). The first half underlying operating profit margin, including Joint Ventures,increased to 2.4 per cent (2006: 1.7 per cent) and reflects our continuing driveto improve margins through contract selectivity, cost reduction and greaterefficiency. In particular, improving margins over time in the businessesacquired with Mowlem continues to be a significant opportunity for enhancingearnings growth. First half average net debt of £161.6 million (2006 full year post theacquisition of Mowlem: £148.0 million) and net debt at 30 June 2007 of £139.7million (December 2006: £108.0 million) were in line with expectations. Themovements in debt include a substantial cash outflow in the first half due topayments of £37.2 million to pension funds in line with our pension deficitrecovery plan, net capital expenditure and acquisition and disposal payments of£18.3 million and the final 2006 dividend payment of £16.6 million. We expect astrong second half cash inflow from operations and to achieve our objective foraverage net debt in the full year of around £150 million. We continue to operate in three main areas - support services, constructionservices and investments - in which we group together activities of a similartype and risk profile to make it easier to report our earnings on a consistentbasis. Support services In this segment we report the results of our facilities management, facilitiesservices, rail infrastructure, road maintenance and consultancy businesses. 2007 2006 Change from £m £m 2006 %--------------------------------------------------------------------------------Revenue(1) - Group 749.0 630.8- Joint Ventures 109.6 48.5-------------------------------------------------------------------------------- 858.6 679.3 26-------------------------------------------------------------------------------- Underlying operating profit(1) - Group 18.6 15.0- Joint Ventures 6.2 2.4-------------------------------------------------------------------------------- 24.8 17.4 43-------------------------------------------------------------------------------- (1) Continuing operations before intangible amortisation, goodwill impairment, restructuring costs and non-operating items Revenue in support services increased by 26 per cent, of which some 19 per centwas due to organic growth, with the remainder attributable to having a fullfirst half contribution from the businesses acquired with Mowlem in February2006. Organic growth was driven primarily by increased revenues from facilitiesmanagement, both for public and private sector customers, notably the Ministryof Defence, BT, Virgin Media and Norwich Union, and from highways maintenance inthe UK and Canada, partially offset by lower volumes in rail infrastructure. Underlying operating profit increased by almost 43 per cent, reflecting revenuegrowth, with operating margins increasing from 2.6 per cent to 2.9 per cent,primarily as a result of a strong performance by our joint venture defencecontracts. Increasing margins, over time, in the businesses acquired with Mowlemremains a key objective, as this offers significant opportunities for profitablegrowth. We expect to make further progress in this regard in the second half andfor the full year operating margin in this segment to be significantly ahead ofthe 2.9 per cent achieved at the half year. Overall, new order intake in support services has remained healthy and the valueof our order book for this segment at 30 June 2007 was £8.6 billion (December2006: £8.4 billion). The outlook in this segment continues to be positive with forecast growth in theUK support services market of some 5 per cent per annum over the next fiveyears. Public and private sector outsourcing is expected to provide significantopportunities for further growth in facilities management and road maintenance.The decline in the UK rail infrastructure market has stabilised and the outlookis for potential growth with increased expenditure on network and stationenhancement projects. Network Rail's intention to reduce its suppliers of trackrenewal services from six to four remains an opportunity for Carillion Rail toincrease its market share as we believe we are well positioned in this market,particularly in the more specialised area of switches and crossings renewals. In our international regions we also expect opportunities for further growth. InCanada, the outsourcing of roads maintenance continues to be a growth market andour facilities management activities in the Middle East and Canada are expectedto achieve further growth in the second half of 2007 and beyond. Construction services In this segment, we report the results of our UK building, civil engineering anddevelopments businesses and the construction activities of Internationalbusinesses. 2007 2006 Change from £m £m 2006 %--------------------------------------------------------------------------------Revenue(1) - Group 861.5 843.0- Joint Ventures 124.9 115.8 ---------------------------------------------- 986.4 958.8 3--------------------------------------------------------------------------------Underlying operating profit(1) - Group 9.2 (2.3)- Joint Ventures 9.3 10.1 --------------------------------------------- 18.5 7.8 137-------------------------------------------------------------------------------- (1) Continuing operations before intangible amortisation, goodwill impairment, restructuring costs and non-operating items Revenue in construction services increased by three per cent due to having afull first half contribution from the businesses acquired with Mowlem inFebruary 2006, organic growth in the UK defence and roads sectors and in theMiddle East, offset by reduced revenue from UK building where our focus is onincreasing margins rather than revenue. Underlying operating profit increased by 137 per cent, primarily due to animproved operating performance that reflects our focus on efficiency and projectselectivity, and lower bid costs for PPP projects. Consequently, the totaloperating margin in this segment at the half year improved from 0.8 per cent to1.9 per cent, in line with our objective of improving margins ahead of revenue. Overall, opportunities for new orders in this segment have remained strong andthe value of our construction services order book at 30 June was £2.4 billion(December 2006: £2.9 billion). The outlook in our construction markets is for continuing growth. In the UK, thenon-housing new build market is forecast to grow at some 6 per cent per annumover the next five years. However, we shall continue to focus on using thesebuoyant market conditions to improve margins ahead of revenues. In the Middle East we are targeting significant opportunities for growth thatcould potentially more than double revenue from this region over the next fiveyears, as we seek to extend our current activities in Dubai and Oman to AbuDhabi and Egypt. In Canada, there are also prospects for further growth,primarily from PPP construction projects. Investments In this segment we report the equity returns on our investments in PPP projectsin our chosen sectors of Defence, Health, Education, Transport, Secure and otherGovernment accommodation. 2007 2006 Change from £m £m 2006 %--------------------------------------------------------------------------------Revenue(1) - Group 0.4 7.2- Joint Ventures 83.2 72.3 --------------------------------------------- 83.6 79.5 5--------------------------------------------------------------------------------Underlying operating profit(1) - Group 0.4 4.6- Joint Ventures 11.7 8.6 --------------------------------------------- 12.1 13.2 (8)-------------------------------------------------------------------------------- (1) Continuing operations before intangible amortisation, goodwill impairment, restructuring costs and non-operating items At 30 June 2007, we had a portfolio of 24 investments in financially closed PPPprojects in which we had already invested some £76 million and commitments toinvest a further £92 million, which will bring our total investment in theseprojects to £168 million. The Directors' valuation of our portfolio at 30 June2007 was £277 million (December 2006: £238 million), based on discounting thecash flows from these investments and commitments at eight per cent. As expected, underlying operating profit in this segment reduced for tworeasons, upon which we have commented previously. First, the sale of eightequity investments in September 2006, at an exceptional profit of £25.6 million,reduced first half profit in 2007 by some £3.5 million. Second, Group operatingprofit in the first half of 2006 benefited from a one-off fee as a result ofachieving financial close on the £12 billion Allenby Connaught project for theMinistry of Defence in April 2006. However, these two factors were largelyoffset by growing returns from our portfolio of investments in financiallyclosed projects, particularly from the addition of Allenby Connaught, and thiscontinues to generate substantial value for the Group. Overall, the outlook in our chosen sectors of the PPP market, both in the UK andCanada, remains positive. Through our ability to win and deliver PPP projectssuccessfully, we expect to continue to build a portfolio of good qualityinvestments that will generate significant value for the Group. In August 2007 a Carillion joint venture achieved financial close on the £200million Sault Area Hospital in Ontario, Canada, in which we will invest £3.5million of equity. We expect to invest up to £6 million of equity in two NHSIndependent Sector Treatment Centre projects for which we are the preferredbidder - London North and Bedfordshire and Hertfordshire. In addition, we areshortlisted for a further eight projects with a potential equity requirement ofup to £68 million. Beyond that we expect continuing opportunities to bid forfurther PPP projects in the UK and Canada. Prospects Following the successful acquisition and integration of Mowlem we are in astrong position and we are confident about the future in our UK andInternational markets. With a positive overall outlook in our key markets, theBoard expects Carillion to make further good progress in the second half of 2007and deliver materially enhanced earnings in the full year. Carillion plcUnaudited group income statementfor the six months ended 30 June -------------------------------------------------------------------------------- Year ended 31 December 2007 2006(1) 2006(1) Note £m £m £m--------------------------------------------------------------------------------Continuing operationsTotal revenue 1,928.6 1,717.6 3,562.6Less: Share of jointly controlledentities revenue (317.7) (236.6) (528.5)--------------------------------------------------------------------------------Group revenue 2 1,610.9 1,481.0 3,034.1Cost of sales (1,505.7) (1,395.2) (2,834.6)--------------------------------------------------------------------------------Gross profit 105.2 85.8 199.5Administrative expenses (102.1) (91.3) (189.4)--------------------------------------------------------------------------------Group operating profit/(loss) 2 3.1 (5.5) 10.1--------------------------------------------------------------------------------Analysed between:Group operating profit beforeintangible amortisation, goodwillimpairment and restructuring costs 18.4 7.5 49.9Intangible amortisation and goodwillimpairment (9.8) (7.3) (17.2)Restructuring costs 3 (5.5) (5.7) (22.6)-------------------------------------------------------------------------------- Share of results of jointlycontrolled entities 2 17.5 14.6 31.6--------------------------------------------------------------------------------Analysed between:Operating profit 27.2 21.1 47.7Net financing expense (5.6) (1.6) (8.0)Taxation (4.1) (4.9) (8.1)----------------------------------------------------------------------------------------------------------------------------------------------------------------Profit from operations 2 20.6 9.1 41.7--------------------------------------------------------------------------------Analysed between:Profit from operations beforeintangible amortisation, goodwillimpairment and restructuring costs 35.9 22.1 81.5Intangible amortisation and goodwillimpairment (9.8) (7.3) (17.2)Restructuring costs 3 (5.5) (5.7) (22.6)-------------------------------------------------------------------------------- Non-operating items 3 0.5 - 25.3Net financing (expense)/income 4 (1.6) 4.8 1.4--------------------------------------------------------------------------------Profit before taxation 19.5 13.9 68.4--------------------------------------------------------------------------------Analysed between:Profit before tax, intangibleamortisation, goodwill impairment,restructuring costs and non-operatingitems 34.3 26.9 82.9Intangible amortisation and goodwillimpairment (9.8) (7.3) (17.2)Restructuring costs 3 (5.5) (5.7) (22.6)Non-operating items 3 0.5 - 25.3-------------------------------------------------------------------------------- Taxation 5 (1.9) (1.6) (7.2)--------------------------------------------------------------------------------Profit for the period from continuingoperations 17.6 12.3 61.2Discontinued operationsLoss for the period from discontinuedoperations 6 (1.4) (2.2) (0.8)--------------------------------------------------------------------------------Profit for the period 16.2 10.1 60.4--------------------------------------------------------------------------------Profit attributable to:Equity holders of the parent 15.1 9.0 58.2Minority interests 1.1 1.1 2.2--------------------------------------------------------------------------------Profit for the period 16.2 10.1 60.4-------------------------------------------------------------------------------- Earnings per share 7From continuing operationsBasic 5.9p 4.3p 21.9pDiluted 5.8p 4.3p 21.6pFrom continuing and discontinuedoperationsBasic 5.4p 3.5p 21.6pDiluted 5.3p 3.5p 21.3p--------------------------------------------------------------------------------Total dividend declared for the period 8 3.5p 3.1p 9.0p-------------------------------------------------------------------------------- (1) Restated in respect of discontinued operations (see note 6) Carillion plcUnaudited group balance sheetas at 30 June 2007 2006 At 31 December 2006 Note £m £m £m--------------------------------------------------------------------------------AssetsNon-current assetsProperty, plant and equipment 146.6 134.4 146.6Intangible assets 586.7 569.0 596.1Retirement benefit assets 24.7 5.4 10.9Investments in associates andjointly 200.2 162.4 178.8controlled entitiesOther investments 15.9 19.6 15.0Deferred tax assets 30.6 88.2 55.4-------------------------------------------------------------------------------- Total non-current assets 1,004.7 979.0 1,002.8-------------------------------------------------------------------------------- Current assetsInventories 25.1 25.9 38.5Trade and other receivables 787.5 997.2 875.3Cash and cash equivalents 141.0 214.1 144.5Income tax receivable 0.5 0.5 0.2Assets classified as held for sale 6 11.1 4.5 -Derivative financial instruments - - 0.8-------------------------------------------------------------------------------- Total current assets 965.2 1,242.2 1,059.3-------------------------------------------------------------------------------- Total assets 1,969.9 2,221.2 2,062.1-------------------------------------------------------------------------------- LiabilitiesCurrent liabilitiesBorrowings (11.5) (31.1) (12.6)Derivative financial instruments (1.1) (0.1) -Trade and other payables (1,082.1) (1,313.2) (1,195.8)Provisions (7.7) - (2.4)Liabilities classified as held for sale 6 (10.6) (9.5) -Income tax payable (13.2) (15.3) (13.0)-------------------------------------------------------------------------------- Total current liabilities (1,126.2) (1,369.2) (1,223.8)-------------------------------------------------------------------------------- Non-current liabilitiesBorrowings (269.2) (301.4) (239.9)Retirement benefit liabilities (62.7) (170.1) (123.8)Deferred tax liabilities (32.3) (7.0) (37.4)Provisions (3.5) (1.7) (3.5)-------------------------------------------------------------------------------- Total non-current liabilities (367.7) (480.2) (404.6)-------------------------------------------------------------------------------- Total liabilities (1,493.9) (1,849.4) (1,628.4)-------------------------------------------------------------------------------- Net assets 2 476.0 371.8 433.7-------------------------------------------------------------------------------- EquityIssued share capital 11 140.6 140.4 140.6Share premium 11 8.6 8.5 8.6Reserves 11 181.7 188.9 172.7Retained earnings 11 144.1 33.0 110.8-------------------------------------------------------------------------------- Equity attributable to shareholdersof the parent 475.0 370.8 432.7Minority interests 11 1.0 1.0 1.0-------------------------------------------------------------------------------- Total equity 476.0 371.8 433.7-------------------------------------------------------------------------------- Carillion plcUnaudited group cash flow statementfor the six months ended 30 June -------------------------------------------------------------------------------- Year ended 31 December 2007 2006(1) 2006(1) Note £m £m £m-------------------------------------------------------------------------------- Continuing operationsCash flows from operating activitiesGroup operating profit/(loss) 3.1 (5.5) 10.1Depreciation, amortisation and impairment 21.3 17.0 36.7(Profit)/loss on disposal of property, plantand equipment (3.3) 0.5 (1.9)Share-based payment expense 1.5 0.6 1.3Other non-cash movements 2.1 2.2 (0.2)Restructuring costs 5.5 5.7 22.6-------------------------------------------------------------------------------- Operating profit before changes in workingcapital and provisions 30.2 20.5 68.6Decrease in inventories 13.6 8.8 -Decrease/(increase) in trade and other receivables 93.3 (150.9) (56.6)(Decrease)/increase in trade and other payables (106.2) 199.2 80.0Increase in provisions - - 0.1-------------------------------------------------------------------------------- Cash generated from operations before pensiondeficit recovery payments and restructuring costs 30.9 77.6 92.1Deficit recovery payments to pension schemes (37.2 (23.0) (31.8)Restructuring costs (0.3) (4.3) (18.2)-------------------------------------------------------------------------------- Cash generated from operations (6.6) 50.3 42.1Financial income received 5.9 6.2 15.4Financial expense paid (10.5) (7.2) (17.4)Taxation 7.3) (1.2) 1.7--------------------------------------------------------------------------------Net cash flows from operating activities (3.9) 48.1 41.8-------------------------------------------------------------------------------- Cash flows from investing activitiesDisposal of property, plant and equipment 6.7 0.8 12.1Disposal of investments in jointly controlled entities 0.5 - 47.3Dividends received from jointly controlledentities 12.9 7.4 15.7Disposal of businesses, net of cash disposed of - 26.7 30.4Acquisition of subsidiary, net of cash acquired - (122.1) (122.3)Acquisition of intangible assets (0.7) (0.3) (1.8)Acquisition of property, plant and equipment (11.5) (22.0) (38.5)Acquisition of equity in, and loan advances to, jointly controlled entities (12.4) (2.5) (19.7)Acquisition of other non-current asset investments (0.9) (1.4) (0.5)--------------------------------------------------------------------------------Net cash flows from investing activities (5.4)(113.4) (77.3)-------------------------------------------------------------------------------- Cash flows from financing activitiesProceeds from the issue of share capital - 0.4 0.4Draw down of bank and other loans 27.7 107.1 321.3Repayment of bank loans - - (276.6)Payment of finance lease liabilities (3.0) (2.5) (9.6)Dividends paid to equity holders of the parent (16.6) (14.5) (23.2)Dividends paid to minority interests (1.1) (1.2) (2.3)--------------------------------------------------------------------------------Net cash flows from financing activities 7.0 89.3 10.0-------------------------------------------------------------------------------- Net (decrease)/increase in cash and cashequivalents from continuing operations (2.3) 24.0 (25.5) Discontinued operationsDecrease in cash and cash equivalents fromdiscontinued operations 6 (1.7) (1.1) (1.7)--------------------------------------------------------------------------------Net (decrease)/increase in cash and cashequivalents for the period (4.0) 22.9 (27.2)Cash and cash equivalents at beginning of period 141.4 169.7 169.7Cash and cash equivalents included inliabilities classified as held for sale 6 1.2 - -Effect of exchange rate fluctuations on cash held 0.4 (1.1) (1.1)--------------------------------------------------------------------------------Cash and cash equivalents at end of period 9 139.0 191.5 141.4-------------------------------------------------------------------------------- (1) Restated in respect of discontinued operations (see note 6) Carillion plcReconciliation of net cash flow to movement in net borrowingsfor the six months ended 30 June Year ended 31 December 2007 2006(1) 2006(1) Note £m £m £m--------------------------------------------------------------------------------(Decrease)/increase in cash and cash equivalentsfor the period (4.0) 22.9 (27.2)Drawdown of bank and other loans (27.7) (107.1) (321.3)Repayment of bank loans - - 276.6Payment of finance lease liabilities 3.0 2.5 9.6-------------------------------------------------------------------------------- Increase in net borrowings resulting from cashflows (28.7) (81.7) (62.3)Net borrowings in subsidiaries acquired - (126.1) (126.1)Borrowings included in liabilities classified asheld for sale 1.2 - -Finance lease additions (1.2) (0.5) (13.3)Currency translation differences (3.0) (0.9) 2.9-------------------------------------------------------------------------------- Change in net borrowings during the period (31.7) (209.2) (198.8)Net (borrowings)/cash at beginning of period (108.0) 90.8 90.8-------------------------------------------------------------------------------- Net borrowings at end of period (139.7) (118.4) (108.0)-------------------------------------------------------------------------------- Unaudited statement of recognised income and expensefor the six months ended 30 June Year ended 31 December 2007 2006(1) 2006(1) Note £m £m £m-------------------------------------------------------------------------------- Currency translation differences 11 0.4 0.3 (2.9)Actuarial gains/(losses) on defined benefitpension schemes 33.7 (5.8) 34.6-------------------------------------------------------------------------------- 34.1 (5.5) 31.7Taxation in respect of the above (10.4) 1.7 (11.5)Share of change in fair value of effectivecash flow hedges within jointly controlled entities (net of taxation) 11 18.3 5.4 0.2-------------------------------------------------------------------------------- Income and expense recognised directly in equity 42.0 1.6 20.4 Profit for the period 16.2 10.1 60.4-------------------------------------------------------------------------------- Total recognised income and expense for theperiod 58.2 11.7 80.8-------------------------------------------------------------------------------- Attributable to:Equity holders of the parent 57.1 10.6 78.6Minority interests 1.1 1.1 2.2-------------------------------------------------------------------------------- 58.2 11.7 80.8-------------------------------------------------------------------------------- (1) Restated in respect of discontinued operations (see note 6) Carillion plcNotes to the interim financial statements 1 Basis of preparation Carillion plc (the "Company") is a company domiciled in the United Kingdom (UK).The consolidated interim financial statements of the Company for the six monthsended 30 June 2007 comprise the Company and its subsidiaries (together referredto as the "Group") and the Group's interest in jointly controlled entities. This interim financial information has been prepared applying the accountingpolicies which were applied in the preparation of the Company's publishedconsolidated financial statements for the year ended 31 December 2006. No newaccounting policies have been adopted in the six months ended 30 June 2007. The comparative financial information for the year ended 31 December 2006 doesnot constitute the Company's statutory accounts for that financial year. Thestatutory accounts for the year ended 31 December 2006 have been reported on bythe Company's auditors and delivered to the Registrar of Companies. The auditorshave reported on those accounts; their report was unqualified, did not includereferences to any matter which the auditors drew attention by way of emphasiswithout qualifying their report and did not contain statements under section 237(2) or (3) of the Companies Act 1985. Presentational changes have been made to the income statement, cash flowstatement and segmental reporting note compared to the presentation in theannual report for the year ended 31 December 2006 in order to facilitate agreater understanding and improve the transparency of the Group's reportedresults. 2 Segment reporting Segment information is presented in the consolidated interim financialstatements in respect of the Group's business segments, which are the primarybasis of segment reporting. The business segment reporting format reflects theGroup's management and internal reporting structure. Inter-segment pricing is determined on an arm's length basis. Segment resultsinclude items directly attributable to a segment as well as those that can beallocated on a reasonable basis. Business segments The Group is comprised of the following main business segments: • Support services: Rail infrastructure, roads maintenance, facilities management and other support services • Construction services: UK building, development and civil engineering activities and international construction activities. • Investments: Equity returns on investments in Public Private Partnership (PPP) projects. Segmentalrevenue and Year ended 31profit 2007 2006 December 2006 ------------------------------------------------------------------------------------------------- Operating Operating Operating profit before profit before profit before intangible intangible intangible amortisation, amortisation, amortisation, goodwill goodwill goodwill impairment and impairment and impairment and restructuring restructuring restructuring Revenue costs Revenue costs Revenue costs £m £m £m £m £m £m-------------------------------------------------------------------------------------------------Support servicesGroup 749.0 18.6 630.8 15.0 1,365.0 51.7Share of jointlycontrolledentities 109.6 6.2 48.5 2.4 143.9 7.3------------------------------------------------------------------------------------------------- 858.6 24.8 679.3 17.4 1,508.9 59.0Inter-segment 28.0 - 14.8 - 30.2 -------------------------------------------------------------------------------------------------- Total 886.6 24.8 694.1 17.4 1,539.1 59.0------------------------------------------------------------------------------------------------- Construction servicesGroup 861.5 9.2 843.0 (2.3) 1,667.8 11.4Share of jointlycontrolledentities 124.9 9.3 115.8 10.1 237.9 21.0------------------------------------------------------------------------------------------------- 986.4 18.5 958.8 7.8 1,905.7 32.4Inter-segment 4.8 - - - 4.0 -------------------------------------------------------------------------------------------------- Total 991.2 18.5 958.8 7.8 1,909.7 32.4------------------------------------------------------------------------------------------------- InvestmentsGroup 0.4 0.4 7.2 4.6 1.3 7.1Share of jointlycontrolledentities 83.2 11.7 72.3 8.6 146.7 19.4------------------------------------------------------------------------------------------------- 83.6 12.1 79.5 13.2 148.0 26.5Inter-segment - - - - - -------------------------------------------------------------------------------------------------- Total 83.6 12.1 79.5 13.2 148.0 26.5------------------------------------------------------------------------------------------------- Group eliminationsand unallocateditems (32.8) (9.8) (14.8) (9.8) (34.2) (20.3)------------------------------------------------------------------------------------------------- ConsolidatedGroup 1,610.9 18.4 1,481.0 7.5 3,034.1 49.9Share of jointlycontrolledentities 317.7 27.2 236.6 21.1 528.5 47.7------------------------------------------------------------------------------------------------- Total 1,928.6 45.6 1,717.6 28.6 3,562.6 97.6------------------------------------------------------------------------------------------------- 2007 2006 Year ended 31 December 2006 £m £m £m-------------------------------------------------------------------------------- Group and share of jointly controlled entitiesoperating profit before intangibleamortisation, goodwill impairment and restructuring costs 45.6 28.6 97.6Net financing (expense)/income- Group (1.6) 4.8 1.4- Share of jointly controlled entities (5.6) (1.6) (8.0) Share of jointly controlled entities taxation (4.1) (4.9) (8.1)-------------------------------------------------------------------------------- Underlying profit before taxation fromcontinuing operations 34.3 26.9 82.9Intangible amortisation and goodwill impairment (1) (9.8) (7.3) (17.2)Restructuring costs (1) (5.5) (5.7) (22.6)Non-operating items 0.5 - 25.3-------------------------------------------------------------------------------- Profit before taxation from continuing operations 19.5 13.9 68.4Taxation (1.9) (1.6) (7.2)-------------------------------------------------------------------------------- Profit for the period from continuing operations 17.6 12.3 61.2 Discontinued operationsLoss for the period from discontinued operations (1.4) (2.2) (0.8)-------------------------------------------------------------------------------- Profit for the period 16.2 10.1 60.4-------------------------------------------------------------------------------- (1)Intangible amortisation and goodwill impairment and restructuring costs arise in the following segments: 2007 2006 Year ended 31 December 2006------------------------------------------------------------------------------------------------------------- Intangible Restructuring Intangible Restructuring Intangible Restructuring amortisation costs amortisation costs amortisation costs and goodwill and goodwill and goodwill impairment impairment impairment £m £m £m £m £m £m------------------------------------------------------------------------------------------------------------- Supportservices (6.7) - (5.2) - (11.9) (6.0)Constructionservices (2.3) - (1.5) - (3.6) (1.5)Investments - - (0.1) - (0.4) (0.2)UnallocatedGroup items (0.8) (5.5) (0.5) (5.7) (1.3) (14.9)------------------------------------------------------------------------------------------------------------- Total (9.8) (5.5) (7.3) (5.7) (17.2) (22.6)------------------------------------------------------------------------------------------------------------- Depreciation, amortisation and impairment and capital expenditure arise in thefollowing segments: 2007 2006 Year ended 31 December 2006---------------------------------------------------------------------------------------------------------------------- Depreciation, Capital Depreciation, Capital Depreciation, Capital amortisation expenditure amortisation expenditure amortisation expenditure and impairment and impairment and impairment £m £m £m £m £m £m---------------------------------------------------------------------------------------------------------------------- Supportservices 13.5 7.3 7.1 7.8 23.8 28.9Constructionservices 3.9 1.8 1.9 2.3 7.0 4.7Investments - - 0.1 - 0.4 -UnallocatedGroup items 3.9 4.3 7.9 10.8 5.5 19.7---------------------------------------------------------------------------------------------------------------------- Total 21.3 13.4 17.0 20.9 36.7 53.3---------------------------------------------------------------------------------------------------------------------- Segmental net assets 2007 2006 Year ended 31 December 2006 £m £m £m--------------------------------------------------------------------------------Support servicesOperating assets 716.0 714.1 761.5Investments in jointly controlled entities 4.4 4.6 2.1-------------------------------------------------------------------------------- Total operating assets 720.4 718.7 763.6Total operating liabilities (375.5) (333.3) (420.2)-------------------------------------------------------------------------------- Net operating assets 344.9 385.4 343.4-------------------------------------------------------------------------------- Construction servicesOperating assets 731.0 934.9 832.0Investments in jointly controlled entities 31.5 35.4 45.8-------------------------------------------------------------------------------- Total operating assets 762.5 970.3 877.8Total operating liabilities (639.3) (890.0) (709.9)-------------------------------------------------------------------------------- Net operating assets 123.2 80.3 167.9-------------------------------------------------------------------------------- InvestmentsOperating assets 7.1 7.2 7.0Investments in jointly controlled entities 164.3 122.4 130.9-------------------------------------------------------------------------------- Total operating assets 171.4 129.6 137.9Total operating liabilities (20.2) (18.0) (22.0)-------------------------------------------------------------------------------- Net operating assets 151.2 111.6 115.9-------------------------------------------------------------------------------- ConsolidatedOperating assets 1,454.1 1,656.2 1,600.5Investments in jointly controlled entities 200.2 162.4 178.8-------------------------------------------------------------------------------- Total operating assets 1,654.3 1,818.6 1,779.3Total operating liabilities (1,035.0) (1,241.3) (1,152.1)-------------------------------------------------------------------------------- Net operating assets before Group items 619.3 577.3 627.2 Group itemsNet assets/(liabilities) classified asheld for sale 0.5 (5.0) -Net deferred tax (liabilities)/assets (1.7) 81.2 18.0Net borrowings (139.7) (118.4) (108.0)Net retirement benefit liabilities (grossof taxation) (38.0) (164.7) (112.9)Net income tax payable (12.7) (14.8) (12.8)Other net assets 48.3 16.2 22.2-------------------------------------------------------------------------------- Net assets 476.0 371.8 433.7-------------------------------------------------------------------------------- Geographic segments 2007 2006 Year ended 31 December 2006 £m £m £m--------------------------------------------------------------------------------United KingdomTotal revenue from external customers 1,668.7 1,476.7 3,041.8Less: share of jointly controlled entitiesrevenue (174.7) (121.9) (260.6)-------------------------------------------------------------------------------- Group revenue from external customers 1,494.0 1,354.8 2,781.2-------------------------------------------------------------------------------- Total operating assets 1,427.6 1,630.9 1,515.5-------------------------------------------------------------------------------- Capital expenditure 10.0 17.2 31.7-------------------------------------------------------------------------------- Middle EastTotal revenue from external customers 166.9 122.0 274.3Less: share of jointly controlled entitiesrevenue (125.9) (105.4) (232.0)-------------------------------------------------------------------------------- Group revenue from external customers 41.0 16.6 42.3-------------------------------------------------------------------------------- Total operating assets 33.4 32.5 38.9-------------------------------------------------------------------------------- Capital expenditure 0.9 0.3 1.3-------------------------------------------------------------------------------- Canada and the CaribbeanTotal revenue from external customers 77.4 73.9 163.5Less: share of jointly controlled entitiesrevenue (1.5) (1.1) (7.3)-------------------------------------------------------------------------------- Group revenue from external customers 75.9 72.8 156.2-------------------------------------------------------------------------------- Total operating assets 125.5 91.6 117.2-------------------------------------------------------------------------------- Capital expenditure 2.4 3.4 20.2-------------------------------------------------------------------------------- Rest of the WorldTotal revenue from external customers 15.6 45.0 83.0Less: share of jointly controlled entitiesrevenue (15.6) (8.2) (28.6)-------------------------------------------------------------------------------- Group revenue from external customers - 36.8 54.4-------------------------------------------------------------------------------- Total operating assets 67.8 63.6 107.7-------------------------------------------------------------------------------- Capital expenditure 0.1 - 0.1-------------------------------------------------------------------------------- ConsolidatedTotal revenue from external customers 1,928.6 1,717.6 3,562.6Less: share of jointly controlled entitiesrevenue (317.7) (236.6) (528.5)-------------------------------------------------------------------------------- Group revenue from external customers 1,610.9 1,481.0 3,034.1-------------------------------------------------------------------------------- Total operating assets 1,654.3 1,818.6 1,779.3-------------------------------------------------------------------------------- Capital expenditure 13.4 20.9 53.3-------------------------------------------------------------------------------- 3 Restructuring costs and non-operating items Restructuring costsRestructuring costs of £5.5 million (six months ended 30 June 2006: £5.7million; year ended 31 December 2006: £22.6 million) primarily relates toproperty exit costs arising from a review of the Group's requirements followingthe acquisition of Mowlem plc in 2006. A tax credit relating to these costs of£1.7 million (six months ended 30 June 2006: £1.7 million; year ended 31December 2006: £5.0 million) has been included within income tax in the incomestatement. Non-operating items 2007 2006 Year ended 31 December 2006 £m £m £m-------------------------------------------------------------------------------- Profit on disposal of investments in jointlycontrolled entities 0.5 - 26.0Loss on disposal of businesses - - (0.7)-------------------------------------------------------------------------------- 0.5 - 25.3--------------------------------------------------------------------------------There is no income tax associated with any of the non-operating items in any ofthe above periods. 4 Financial income and expense 2007 2006 Year ended 31 December 2006 £m £m £m--------------------------------------------------------------------------------Financial incomeBank interest receivable 1.8 3.9 8.1Other interest receivable 4.1 5.3 7.3Expected return on retirement plan assets 41.9 42.2 71.7-------------------------------------------------------------------------------- 47.8 51.4 87.1-------------------------------------------------------------------------------- Financial expenseInterest payable on bank loans and overdrafts (7.2) (5.7) (13.3)Other interest payable and similar charges (3.3) (1.5) (4.2)Interest cost on retirement plan obligations (38.9) (39.4) (68.2)-------------------------------------------------------------------------------- (49.4) (46.6) (85.7)-------------------------------------------------------------------------------- Net financial (expense)/income (1.6) 4.8 1.4-------------------------------------------------------------------------------- 5 Income tax The Group's income tax expense (including the Group's share of jointlycontrolled entities income tax) for the six months ended 30 June 2007 iscalculated based on the estimated average annual effective income tax rate of27% (six months ended 30 June 2006: 27%). This effective rate differs to the UKstandard corporation tax rate of 30% (six months ended 30 June 2006: 30%) due toitems such as the effect of tax rates in foreign jurisdictions, non-deductibleexpenses, the effect of tax losses utilised and under/over provisions inprevious years. It has been announced that the UK standard corporation tax rate applicable tothe Company will change from 30% to 28% with effect from 1 April 2008. Deferredtax has been calculated in accordance with IAS 12 'Income Taxes' at 30% forthose timing differences which reverse before 1 April 2008 and at 28% for thosetiming differences which are expected to reverse after 1 April 2008. Due to theuncertainty of when the timing differences will reverse, similar to otherorganisations, it has not been possible to calculate the full financial impactof this change in these financial statements. 6 Discontinued operations and non-current assets held for sale Following the Board's decision to dispose of the Group's non-core railactivities in Sweden and Denmark, these operations have been classified asdiscontinued and available for sale. The income statement and cash flowstatement for comparative periods have been restated accordingly. Disposal ofthe operations completed in July 2007 and is subject to a completion accountsprocess. The results of these operations, which were previously reported in the supportservices segment were as follows: 2007 2006 Year ended 31 December 2006 £m £m £m-------------------------------------------------------------------------------- Revenue 14.8 8.1 30.8Cost of sales (14.1) (8.2) (27.6)-------------------------------------------------------------------------------- Gross profit/(loss) 0.7 (0.1) 3.2Administrative expenses (2.1) (2.1) (4.0)-------------------------------------------------------------------------------- Operating loss (1.4) (2.2) (0.8)Net financial income - - --------------------------------------------------------------------------------- Loss before tax (1.4) (2.2) (0.8)Taxation - - --------------------------------------------------------------------------------- Loss for the period from discontinued operations (1.4) (2.2) (0.8)-------------------------------------------------------------------------------- The analysis of the assets and liabilities held for sale relating to theseoperations is as follows: -------------------------------------------------------------------------------- 2007 £m--------------------------------------------------------------------------------Assets classified as held for saleNon-current assetsProperty, plant and equipment 1.1 Current assetsTrade and other receivables 10.0-------------------------------------------------------------------------------- Assets classified as held for sale 11.1-------------------------------------------------------------------------------- Liabilities classified as held for saleCurrent liabilitiesBorrowings (1.2)Trade and other payables (9.4)-------------------------------------------------------------------------------- Liabilities classified as held for sale (10.6)-------------------------------------------------------------------------------- The net cash flows relating to discontinued operations during the period are asfollows: 2007 2006 Year ended 31 December 2006 £m £m £m-------------------------------------------------------------------------------- Net cash outflow from operating activities (1.6) (1.0) (1.1)Net cash outflow from investing activities (0.1) (0.1) (0.6)Net cash outflow from financing activities - - --------------------------------------------------------------------------------- Decrease in cash and cash equivalents fromdiscontinued operations (1.7) (1.1) (1.7)-------------------------------------------------------------------------------- 7 Earnings per share (a) BasicThe calculation of earnings per share for the six months ended 30 June 2007 isbased on the profit for the period of £15.1 million (six months ended 30 June2006: £9.0 million; year ended 31 December 2006: £58.2 million) and a weightedaverage number of ordinary shares in issue of 280.2 million (six months ended 30June 2006: 257.7 million; year ended 31 December 2006: 269.5 million),calculated as follows: In millions of shares 2007 2006 Year ended 31 December 2006-------------------------------------------------------------------------------- Issued ordinary shares at beginning of period 281.2 214.9 214.9Effect of own shares held by ESOP and QUEST (1.0) (3.8) (1.9)Effect of shares issued in the period - 46.6 56.5-------------------------------------------------------------------------------- Weighted average number of shares 280.2 257.7 269.5--------------------------------------------------------------------------------(b) Underlying performanceA reconciliation of profit before taxation and basic earnings per share, asreported in the income statement, to underlying profit before taxation andearnings per share is set out below. The adjustments made in arriving at theunderlying performance measures are made to illustrate the impact of non-tradingand non-recurring items. 2007 2006 Year ended 31 December 2006 £m £m £m--------------------------------------------------------------------------------Profit before taxation - continuing operationsProfit before taxation as reported in the incomestatement 19.5 13.9 68.4Restructuring costs 5.5 5.7 22.6Amortisation of intangible assets arising frombusiness combinations 9.8 7.2 16.8Impairment of goodwill - 0.1 0.4Profit on disposal of investments and businesses (0.5) - (25.3)-------------------------------------------------------------------------------- Underlying profit before taxation - continuingoperations 34.3 26.9 82.9Underlying taxation (6.4) (3.3) (16.6)Minority interests (1.1) (1.1) (2.2)-------------------------------------------------------------------------------- Underlying profit attributable to shareholders -continuing operations 26.8 22.5 64.1Underlying loss attributable to shareholders -discontinued operations (1.4) (2.2) (0.8)-------------------------------------------------------------------------------- Underlying profit attributable to shareholders -continuing and discontinued operations 25.4 20.3 63.3-------------------------------------------------------------------------------- -------------------------------------------------------------------------------- 2007 2006 Year ended Pence per Pence per 31 December share share 2006 Pence per share-------------------------------------------------------------------------------- Earnings per shareBasic earnings per share - continuingand discontinued operations 5.4 3.5 21.6Restructuring costs 1.4 1.6 6.5Amortisation of intangible assetsarising from business combinations 2.5 2.8 4.6Impairment of goodwill - - 0.2Profit on disposal of investments andbusinesses (0.2) - (9.4)-------------------------------------------------------------------------------- Underlying basic earnings per share -continuing and discontinued operations 9.1 7.9 23.5Discontinued operations 0.5 0.8 0.3-------------------------------------------------------------------------------- Underlying basic earnings per share -continuing operations 9.6 8.7 23.8-------------------------------------------------------------------------------- (c) Diluted earnings per share The calculation of diluted earnings per share is based on profit as shown in note 7(b) and a weighted average number of ordinary shares outstanding calculated as follows: In millions of shares 2007 2006 Year ended 31 December 2006-------------------------------------------------------------------------------- Weighted average number of ordinary shares 280.2 257.7 269.5Effect of share options in issue 3.0 2.8 3.1-------------------------------------------------------------------------------- 283.2 260.5 272.6-------------------------------------------------------------------------------- 8 Dividends The following dividends were paid by the Company: Year ended 31 2007 2006 December 2006 Pence Pence Pence per per per £m share £m share £m share---------------------------------------------------------------------------------------------- Previous periodfinal dividend 16.6 5.9 14.5 5.2 14.5 5.2Current periodinterim dividend - - - - 8.7 3.1---------------------------------------------------------------------------------------------- 16.6 5.9 14.5 5.2 23.2 8.3---------------------------------------------------------------------------------------------- The following dividends were proposed by the Company: Year ended 31 2007 2006 December 2006 Pence Pence Pence per per per £m share £m share £m share---------------------------------------------------------------------------------------------- Interim 9.8 3.5 8.7 3.1 8.7 3.1Final - - - - 16.6 5.9---------------------------------------------------------------------------------------------- 9.8 3.5 8.7 3.1 25.3 9.0---------------------------------------------------------------------------------------------- The interim dividend for 2007 of 3.5 pence per share was approved by the Boardon 5 September 2007 and will be paid on 9 November 2007 to shareholders on theregister on 14 September 2007. 9 Cash and cash equivalents Cash and cash equivalents comprise: 2007 2006 Year ended 31 December 2006 £m £m £m-------------------------------------------------------------------------------- Cash and cash equivalents 141.0 214.1 144.5Bank overdrafts (2.0) (22.6) (3.1)-------------------------------------------------------------------------------- 139.0 191.5 141.4-------------------------------------------------------------------------------- 10 Pension commitments The following expense was recognised in the income statement in respect ofpension commitments: 2007 2006 Year ended 31 December 2006 £m £m £m--------------------------------------------------------------------------------Charge to operating profitCurrent service cost relating to defined benefitschemes (13.7) (13.7) (29.1)Past service cost relating to defined benefitschemes - - (0.5)Defined contribution schemes (2.1) (2.0) (5.5)-------------------------------------------------------------------------------- Total (15.8) (15.7) (35.1)-------------------------------------------------------------------------------- Credit/(charge) to other finance incomeExpected return on pension scheme assets 41.9 42.2 71.7Interest cost on pension scheme liabilities (38.9) (39.4) (68.2)-------------------------------------------------------------------------------- Net finance return 3.0 2.8 3.5-------------------------------------------------------------------------------- The valuation of the Group's main defined benefit pension schemes were reviewedby the scheme's actuary at 30 June 2007. Based on this review, the scheme's netdeficits (gross of taxation) were estimated as being £38.0 million at 30 June2007, representing a reduction of £74.9 million since 31 December 2006. 11 Reserves and statement of changes in total equity Fair Share Share Translation Hedging value Merger Retained Equity Minority Total capital premium reserve reserve reserve reserve earnings shareholders interests equity funds £m £m £m £m £m £m £m £m £m £m ------------------------------------------------------------------------------------------------------------ At 1 January 2007 140.6 8.6 (3.4) (9.6) 0.9 184.8 110.8 432.7 1.0 433.7 Total recognised income and expense - - 0.1 18.3 - - 38.7 57.1 1.1 58.2 New share capital subscribed - - - - - - - - - - Share options exercised by employees - - - - - - 0.8 0.8 - 0.8 Equity settled transactions (net of deferred tax) - - - - - - 1.0 1.0 - 1.0 Transfer between reserves - - - - - (9.4) 9.4 - - - Dividends paid - - - - - - (16.6) (16.6) (1.1) (17.7) ------------------------------------------------------------------------------------------------------------ At 30 June 2007 140.6 8.6 (3.3) 8.7 0.9 175.4 144.1 475.0 1.0 476.0 ------------------------------------------------------------------------------------------------------------ At 1 January 2006 107.4 8.2 0.7 (10.8) 0.9 8.2 34.1 148.7 1.1 149.8 Total recognised income and expense - - 0.3 5.4 - - 4.9 10.6 1.1 11.7 New share capital subscribed 33.0 0.3 - - - 190.2 - 223.5 - 223.5 Share options exercised by employees - - - - - - 2.1 2.1 - 2.1 Equity settled transactions (net of deferred tax) - - - - - - 0.4 0.4 - 0.4 Transfer between reserves - - - - - (6.0) 6.0 - - - Dividends paid - - - - - - (14.5) (14.5) (1.2) (15.7)------------------------------------------------------------------------------------------------------------ At 30 June 2006 140.4 8.5 1.0 (5.4) 0.9 192.4 33.0 370.8 1.0 371.8 ------------------------------------------------------------------------------------------------------------ At 1 January 2006 107.4 8.2 0.7 (10.8) 0.9 8.2 34.1 148.7 1.1 149.8 Total recognised income and expense - - (4.1) 0.2 - - 82.5 78.6 2.2 80.8 New share capital subscribed 33.2 0.4 - - - 191.3 - 224.9 - 224.9 Share options exercised by employees - - - - - - 2.8 2.8 - 2.8 Equity settled transactions (net of deferred tax) - - - - - - 0.9 0.9 - 0.9 Transfer between reserves - - - 1.0 - (14.7) 13.7 - - - Dividends paid - - - - - - (23.2) (23.2) (2.3) (25.5) ------------------------------------------------------------------------------------------------------------ At 31 December 2006 140.6 8.6 (3.4) (9.6) 0.9 184.8 110.8 432.7 1.0 433.7 ------------------------------------------------------------------------------------------------------------ 12 Company Information This preliminary announcement was approved by the board of directors on 5September 2007. The 2007 Interim Results will be posted to all shareholders by 1October 2007 and both this statement and the 2007 Interim Results will beavailable via the Internet at www.carillionplc.com or on request from theCompany Secretary, Carillion plc, Birch Street, Wolverhampton, WV1 4HY. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Carillion Plc