Interim Management Statement

RNS Number : 4418F

Carillion PLC

09 October 2008

 

9 OCTOBER 2008         

CARILLION PLC

2008 THIRD QUARTER INTERIM MANAGEMENT STATEMENT

Leading UK support services company, Carillion plc, announces its interim management statement for the third quarter of 2008.  

Business performance 

Overall, our principal businesses continue to perform well and the intake of good quality new orders remains strong.  

Support services remains a major driver of earnings growth as we expect to continue increasing revenue at margins of between four and five per cent.  

The previously announced sale of two further equity investments in Public Private Partnership (PPP) projects early in the second half of the year means that Carillion has received sale proceeds from a total of 23 investments in mature projects over the last five years, generating £179 million of cash and £104 million of pre-tax profit for the Group. Carillion's ability to win PPP projects, successfully deliver them into the operational phase and then recycle its equity investments continues to generate significant value. Since the half year, we have won two new PPP projects, increasing our portfolio of financially closed projects to 22, in which we have invested or have commitments to invest some £173 million of equity.  

In the Middle East, we are making good progress towards our objective of increasing our share of revenue from our businesses from £337 million in 2007 to a run rate of over £600 million at a margin of some 6 per cent, by the end of 2009.  

In construction services (excluding the Middle East) our order book and pipeline of probable new orders remains strong and supports our focus on working with the Public Sector and other long term customers and on growing margins rather than revenue in this segment. 

The benefits of acquiring Alfred McAlpine in February 2008 remain ahead of our expectations. The enlarged group structure is firmly established and operating in accordance with Carillion's policies and processes and we remain confident of delivering integration cost savings at the increased run rate of £40 million per annum by the end of 2009.  

The Group's balance sheet remains robust and we continue to expect net borrowing at the year end to be below our original target of £300 million. 

Strategic development 

On 8 October 2008, Carillion acquired the Vanbots Group, a well established construction management services group in Canada with an excellent track record in the health sector, for a net cash consideration of C$27.7 million (£14.3 million).

In line with Carillion's strategy for growth, this acquisition will significantly enhance our ability to deliver integrated solutions in Canada, especially for PPP projects for which Carillion is an established market leader, particularly in the Health sector.

Canada has a major PPP investment programme estimated to be worth some £10 billion over the next five years.  

Outlook

Having created a more resilient business mix through our consistent and successful strategy the outlook for the Group remains unchanged and we continue to expect to achieve strong progress in 2008 and to deliver materially enhanced earnings in 2009. 

Carillion Chief Executive, John McDonough and Group Finance Director, Richard Adam, will host a conference call on this statement for analysts and investors at 9:00am today, Thursday 9 October. The telephone number to join the conference call is + 44 (0) 208 515 2302.

For further information contact:

Richard Adam, Group Finance Director          + 44 (0) 1902 422431

John Denning, Director Group Corporate Affairs        + 44 (0) 1902 316426

9 October 2008

Notes to Editors

Carillion is the UK's leading support services company with a substantial portfolio of Public Private Partnership projects and extensive construction capabilities. 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's portfolio of equity investments in Public Private Partnership projects includes projects in the UK and Canada, particularly in the Defence, Education, Health and Transport sectors.

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

Photographs:

High resolution photographs are available free of charge to the media at www.newscast.co.uk telephone 

+ 44 (0) 207 608 1000.

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.

 

END

 

 

IMSUWUKRWBRRRAA