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 拢27m, up from 拢19m in the first half of 2007.
Turnover at the UK-based support services and construction group rose 27% from 拢1.9bn to 拢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 拢20bn plus 拢4.1bn of probable orders.
Philip Rogerson, chairman of the group, said: 鈥淐arillion 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.鈥�
Cost savings from the integration of Alfred McAlpine, which Carillion bought in February for 拢554.5m, will reach 拢40m a year by the end of 2009 - an increase of 拢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 拢600m by the end of 2009, with a profit margin of about 6%.
The turnover breakdown was:
- Support services: 拢1.2bn (H1 2007: 拢825m)
- Construction: 拢969.6m (拢821.9m)
- PPP: 拢81m (拢83.6m)
- Middle East: 拢181m (164.5m).
John McDonough, chief executive of the group, said: 鈥淭he 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.鈥�
He said that turnover at the construction arm will be flat or fall slightly going forward as the group focuses on large framework deals. 鈥淲e're very comfortable with that,鈥� he said.
On the integration of Alfred McAlpine, McDonough said: 鈥淎ll the big restructuring has happened and now it's back to business as normal.鈥�
Carillion's debt fell to 拢264m, which was ahead of expectations of 拢300m-plus.
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