Final Results

RNS Number : 5306B

Carillion PLC

05 March 2014

Annual results for the year ended 31 December 2013

Performance in line with expectations

	2013	2012⁽¹⁾	Change
Revenue	£4.1bn	£4.4bn	-7%
Underlying profit from operations⁽²⁾	£214.3m	£227.9m	-6%
Underlying operating margin⁽²⁾	5.6%	5.6%	-
Underlying profit before taxation⁽²⁾	£174.7m	£200.0m	-13%
Underlying earnings per share⁽²⁾	34.7p	40.4p	-14%
Profit before taxation	£110.6m	£164.8m	-33%
Basic earnings per share	23.3p	34.6p	-33%
Proposed full-year dividend per share	17.50p	17.25p	+1%

· Financial performance in line with expectations

- Revenue was lower as expected, primarily due to the rescaling of UK construction

- Underlying operating margin⁽²⁾ maintained at 5.6%

- The reductions in underlying profit before taxation⁽²⁾ and underlying earnings per share⁽²⁾ reflected business rescaling and an increase in the net financial expense

- Reported profit before taxation and basic earnings per share reflected the £42.9 million charge for restructuring energy services

· Strong work-winning performance

- £4.9 billion of additional orders and probable orders in the year

- Order book plus probable orders of £18.0 billion (2012: £18.1 billion), after deducting £1.7 billion due to

selling equity investments in Public Private Partnership (PPP) projects and reduced expectations from the

Green Deal and Energy Company Obligation markets, partially offset by the addition of £0.8 billion of orders

acquired with John Laing Integrated Services

- Substantial framework contracts secured in 2013 whose value is not included in the order book

- 81% revenue visibility⁽³⁾ for 2014 (2012: 75% for 2013)

- Pipeline of contract opportunities worth some £37.5 billion (2012: £35.2 billion)

· Net borrowing reduced from half-year peak

- Net borrowing of £215.2 million (2012: £155.8 million), down from £270.8 million at the half year, despite the additional second-half costs of restructuring energy services and of acquiring John Laing Integrated Services, with a significantly improved working capital performance in the second half of the year, reflecting completion of the rescaling of UK construction

- Main revolving credit facility of £770 million extended from 2016 to 2018

- Over £1.1 billion of committed borrowing facilities and private placement funding to support strategy for growth over the medium term

· Business rescaling complete with Group now well positioned for the future

- Planned rescaling of UK construction complete with revenue run-rate stabilised by the year end

- UK energy services restructured as previously announced to reflect lower expectations for Green Deal and

Energy Company Obligation markets

· Proposed full-year dividend increased by 1% to 17.50p (2012: 17.25p)

(1)	Restated on adoption of the amendment to IAS 19.
(2)	The underlying results stated above are based on the definitions included in the key financial figures.
(3)	Based on expected revenue and secure and probable orders, which exclude variable work and re-bids.

Carillion Chairman, Philip Rogerson, commented

"In 2013, Carillion has continued to respond decisively to challenging market conditions, including completing the rescaling of its UK construction activities and the restructuring of its energy services business, which are now aligned in size to their respective markets, while continuing to develop and strengthen its positions in new and existing markets that offer good opportunities for growth. Overall, we expect market conditions to remain challenging in 2014, but with a strong order book, good revenue visibility and substantial pipeline of contract opportunities the Group is now well positioned for the future."

There will be a presentation for analysts and investors today at 08.30am. A telephone dial in facility 0844 800 3850 - Access Code: 429680# will be available for analysts and investors who are unable to attend the presentation. The presentation can be viewed on Carillion's website at www.carillionplc.com/investors/investors_presentations.asp. A replay facility is also available following the call on Toll Free UK: 0800 032 9687 - Access Code: 72950320# and Toll Free US: 1 +44 207 136 9233 - Access Code: 72950320#.

For further information contact:

Richard Adam, Group Finance Director

John Denning, Group Corporate Affairs Director

Finsbury - James Murgatroyd and Gordon Simpson

tel: +44 (0) 1902 422431

tel: +44 (0) 20 7251 3801

5 March 2014

Notes to Editors:

Carillion is a leading integrated support services company with a substantial portfolio of Public Private Partnership projects and extensive construction capabilities. The Group had annual revenue in 2013 of some £4.1 billion, employs around 40,000 people and operates across the UK, in the Middle East and Canada.

The Group has four business segments:

Support services - this includes facilities management, facilities services, energy services, utility services, road

maintenance, rail services and consultancy businesses in the UK, Canada and the Middle East.

Public Private Partnership (PPP) projects - this includes investing activities in PPP projects for Government buildings and infrastructure, mainly in the Defence, Health, Education, Transport and Secure accommodation sectors.

Middle East construction services - this includes building and civil engineering activities in the Middle East.

Construction services(excluding the Middle East) - this includes building, civil engineering and developments activities in the UK and construction activities in Canada.

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

Cautionary statement

This announcement may contain indications of likely future developments and other forward-looking statements that are subject to risk factors associated with, among other things, the economic and business circumstances occurring from time to time in the countries, sectors and business segments in which the Group operates. These and other factors could adversely affect the Group's results, strategy and prospects. Forward-looking statements involve risks, uncertainties and assumptions. They relate to events and/or depend on circumstances in the future which could cause actual results and outcomes to differ materially from those currently anticipated. No obligation is assumed to update any forward-looking statements, whether as a result of new information, future events or otherwise.

Key financial figures

		2013	2012⁽¹⁾	Change
Income statement
Total revenue	£bn	4.1	4.4	-7%
Underlying profit from operations⁽²⁾	£m	214.3	227.9	-6%
Total Group underlying operating margin⁽³⁾	Percentage	5.6	5.6	n/a
Support services underlying operating margin⁽³⁾	Percentage	5.1	5.1	n/a
Middle East construction services underlying operating margin⁽³⁾	Percentage	4.0	6.1	n/a
Construction services (excluding the Middle East) underlying operating margin⁽³⁾	Percentage	4.2	5.6	n/a
Underlying profit before taxation⁽⁴⁾	£m	174.7	200.0	-13%
Profit before taxation	£m	110.6	164.8	-33%
Underlying earnings per share⁽⁵⁾	Pence	34.7	40.4	-14%
Basic earnings per share	Pence	23.3	34.6	-33%
Dividends
Proposed full year dividend per share	Pence	17.50	17.25	+1%
Underlying proposed dividend cover⁽⁵⁾	Times	2.0	2.3	n/a
Basic proposed dividend cover	Times	1.3	2.0	n/a
Cash flow statement
Cash generated from operations⁽⁶⁾	£m	160.9	97.9	+64%
Underlying profit from operations cash conversion	Percentage	75.1	43.0	n/a
Deficit pension contributions	£m	(39.2)	(30.2)	-30%
Balance sheet
Net borrowing	£m	(215.2)	(155.8)	-38%
Committed borrowing facilities maturing in 2017 and 2018	£m	835.0	737.5	+13%
Private placement borrowings maturing between 2017 and 2024 (£135 million and US$280 million)	£m	303.7	310.0	-2%
Net retirement benefit liability (net of taxation)	£m	(295.1)	(269.9)	-9%
Net assets	£m	983.6	1,010.7⁽⁷⁾	-3%

(1)	Restated on adoption of the amendment to IAS 19.
(2)	After Joint Ventures net financial expense of £10.1 million (2012: £16.0 million) and taxation charge of £4.4 million (2012: £1.7 million) and before intangible amortisation, non-recurring operating items and non-operating items.
(3)	Before Joint Ventures net financial expense and taxation, intangible amortisation and non-recurring operating items.
(4)	After Joint Ventures taxation charge of £4.4 million (2012: £1.7 million) and before intangible amortisation, non-recurring operating items and non-operating items.
(5)	Before intangible amortisation, non-recurring operating items and non-operating items.
(6)	Before pension deficit recovery payments and non-recurring operating items and after dividends received from Joint Ventures and proceeds on the disposal of Public Private Partnership equity investments.
(7)	Restated for the retrospective adjustment to provisional amounts recognised on the acquisition of the Bouchier Group in 2012.