£82m pre-tax profit despite diffcult Mowlem acquisition

Carillion has delivered a 48% hike in pre-tax profit as it finally completes the integration of troubled acquisition Mowlem.

Pre-tax profit jumped to £82.1m for the year ending 31 December. However this excludes £14.5m attributed to restructuring costs, non operating items and amortisation. When these are include pre-tax profit falls to £67.6m.

The contractor said it was finally set to see some cost efficiencies from Mowlem which it bought in February 2006. It will generate cost savings of £26m per annum, up from the predicted £15, however the one off implementation cost grew from £15m to £28m.

Carillion’s purchase of Mowlem has been dogged by problems including a £135m writedown.

Chief executive John McDonough said that all areas of the business had seen growth and announced that the contractor plans to bid “selectively” for Olympic projects.

The only division to be hit by a fall in revenue is Carillion Rail which continued to suffer from the loss of Network Rail contract. Turnover was up 57% to £3.6bn and its order book more than doubled to £16bn.

Chairman Philip Rogerson said: “With an order book of £16 billion and strong positions in a wider range of growth markets, we have created a more resilient business, capable of accelerating our strategy for growth. This positive outlook for the group confirms the board's view that Carillion is firmly on track to deliver materially enhanced earnings in 2007.”

Carillion’s shares were trading 3% higher at 380.25 p a share at 9.30am Wednesday morning.