Acquisition Update

RNS Number : 7218U

Carillion PLC

19 May 2008

 

Carillion plc 

ACQUISITION UPDATE

Carillion notes the press comment speculating on the accounting treatment of its recent acquisition, Alfred McAlpine plc and wishes to clarify that the fair value exercise that it is currently undertaking in respect of the acquisition of Alfred McAlpine plc will have no impact on the Group's total net assets, profits or cash flow.     

As required by International Financial Reporting standards, Carillion will be including in the acquired balance sheet of Alfred McAlpine plc its assessment of the fair value of the net assets obtained with that business.  Any differences between these fair values and the amounts at which the assets were recorded in the balance sheet of Alfred McAlpine plc are required to be treated as pre-acquisition adjustments and will have no impact on the Group's total net assets, profits or cash flow. Only post acquisition restructuring costs, previously announced at £30 million, are required to be deducted from Carillion's profits and net assets.  Such amounts will be treated as 'exceptional' charges and will have no impact on underlying results.

Carillion's preliminary assessment of these fair values will be provided in the pre-close update on trading scheduled for 30 June 2008. However, overall Carillion does not expect the outcome of the assessment of fair value adjustments to be materially different from its original expectations.  

As stated in the Interim Management Statement on 7 May, Carillion has made substantial progress towards delivering the £30 million of annualised cost savings it expects to achieve from the acquisition, with over 60 per cent of these savings already firmly identified. Carillion also confirms that it continues to expect to make strong progress in 2008 and deliver materially enhanced earnings in 2009.  Carillion remains on track to meet its previously announced objective of achieving net borrowing of £300 million by the year end.

Carillion will be hosting a presentation for analysts and investors on its support services business and on its pre-close update on trading, on 30 June 2008.   

Notes to editors

Carillion is one of the UK's leading support services, Public Private Partnership project and construction companies. The Group has annual revenue of around £5 billion, employs some 50,000 people and operates across the UK, in the Middle East, Canada and the Caribbean. 

In the UK, Carillion's principal market sectors are Defence, Education, Health, Facilities Management & Services, Rail, Roads, Building, Civil Engineering and Utilities Services. 

In the Middle East, Carillion's principal market sectors are Construction and Facilities Management. In Canada and the Caribbean, the Group's main sectors are Health, Roads Maintenance and Construction.

Carillion has a substantial portfolio of equity investments in Public Private Partnership projects, particularly in the Defence, Education, Health and Transport sectors.

This and other Carillion news releases can be found at www.carillionplc.com 

For further information contact

Richard Adam, Group Financial Director                 [phone]

John Denning, Director Group Corporate Affairs    [phone] 

 

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