Carillion pre-tax profits hit by acquisition
Support services company Carillion has been hit by a 35 per cent fall in pre-tax profits, it announced this morning. The Wolverhampton-based company said the drop was due to one-off acquisition costs totalling £28m. Revenue for the last six months also suffered a decline.
The company also announced that its group chief executive, John McDonough, would be retiring from his role on 31 December 2011. He will be succeeded by the company's current chief operating officer, Richard Howson.
Carillion unveiled its half-year accounts as it won two contracts in Canada and facilities management work in the UK which could be worth up to £250m.
The company was named as the preferred bidder in Alberta for road maintenance work and in Ontario, was awarded an 11-year area maintenance contract by the Ontario Department of Transportation. The latter contract is expected to be worth about £83m.
In the UK, Carillion has been selected as the preferred bidder for contracts to provide hard and soft facilities management services for two local authorities. The outsourcing contracts are expected to be worth £50m over four years.
In the six months to 30 June, Carillion's pre-tax profits fell from £58.8m in 2010 to £38.2m. The company said this was due to a £28m one-off cost relating to the acquisition and integration of Carillion Energy Services, which was completed this year.
Underlying profit before tax increased 10 per cent to £72.5m.
Revenue decreased from £2.5bn to £2.45bn, while earnings per share also took a dip of 39 per cent, down to 12.9 pence per share.
Carillion said that for the year ahead, its order book plus probable orders was currently worth £19.4bn. Its pipeline of contract opportunities was up 25 per cent to £32bn, said the company, which includes "major public sector outsourcing opportunities".
Within the six-month period, Carillion agreed a £100m private placement debt facility.
Carillion chairman, Philip Rogerson, said: "The group's strong track record of profitable growth continues to reflect its well-balanced and resilient UK and international business mix and good revenue visibility.
"We expect to make further progress in the second half of 2011 to deliver earnings growth in line with market expectations. Furthermore, with strong market positions and a record pipeline of contract opportunities, the group continues to target strong international growth and substantial growth in UK support services over the medium term."
