Support services, PPP and construction group reveals highest-ever amount of forward business
Carillion expects its order book to hit £20bn for the first six months of 2008.
In a confident trading update, the construction giant announced recent contract wins such as the Olympic Media Centre, Heathrow Terminal 5 and some £700m of work in the Middle East had helped it achieve a highest-ever order book, up from £15.8bn over the same period last year.
Carillion also said the integration of Alfred McAlpine into the company was progressing smoothly, with cost savings predicted to reach a run rate of £40m by the end of 2009, higher than the previously anticipated £30m.
The company’s support services work continues to make up the majority of its order book, with £11.5bn to come from ongoing contracts with companies such as BT, Philips and AXA. Its PPP division has investments in 22 financially closed projects, and Carillion expects to have up to £5bn of work in the sector on its books at the half-year end.
Construction work in the Middle East is a major growth sector for the company, with expectations of revenues of £600m by the end of 2009 at margins of 6%. In the UK, the company’s order book in the sector will be worth some £2.7bn, it predicts. Carillion said its contract for the Olympic Media Centre, still officially unconfirmed by the Olympic Delivery Authority, would be £300m.
Carillion made the trading update ahead of its interim results, which will be announced on 28 August.