Cost savings from Alfred McAlpine takeover and growth in FM outsourcing boost results at construction and support services group
Carillion has posted a robust set of results for the six months ended 30 June 2008, which saw a 42% rise in pre-tax profit to £27m, up from £19m in the first half of 2007.
Turnover at the UK-based support services and construction group rose 27% from £1.9bn to £2.4bn compared with the same period a year earlier.
The firm said that cost savings from the integration of Alfred McAlpine have exceeded its expectations and the order book stands at £20bn plus £4.1bn of probable orders.
Philip Rogerson, chairman of the group, said: “Carillion has continued to perform strongly and our results for the first half of 2008 are slightly ahead of our expectations, which reflects the group's strength and increased resilience.”
Cost savings from the integration of Alfred McAlpine, which Carillion bought in February for £554.5m, will reach £40m a year by the end of 2009 - an increase of £10m on the group's original estimate.
Carillion also pointed to a strong Middle East market and said it is on track to double its 2007 turnover to £600m by the end of 2009, with a profit margin of about 6%.
The turnover breakdown was:
- Support services: £1.2bn (H1 2007: £825m)
- Construction: £969.6m (£821.9m)
- PPP: £81m (£83.6m)
- Middle East: £181m (164.5m).
John McDonough, chief executive of the group, said: “The growth in support services is very pleasing. The credit crunch has been good for us in the sense that more people are outsourcing their FM contracts.”
He said that turnover at the construction arm will be flat or fall slightly going forward as the group focuses on large framework deals. “We're very comfortable with that,” he said.
On the integration of Alfred McAlpine, McDonough said: “All the big restructuring has happened and now it's back to business as normal.”
Carillion's debt fell to £264m, which was ahead of expectations of £300m-plus.