Re Contract

RNS Number : 3160A

Carillion PLC

31 January 2011

 

31 January 2011

Carillion makes positive start to 2011 

Signed Memorandum of Understanding with UK Government

New orders and probable new orders worth some £350 million

Following a strong performance in 2010, in respect of which Carillion expects to report continuing good growth in underlying profit before tax⁽¹⁾ and underlying earnings⁽²⁾ per share, and year-end net cash of well over £100 million,  Carillion has made a positive start to 2011.    

Memorandum of Understanding

Carillion has had constructive discussions with the UK Government under its Supplier Engagement Programme and has now signed a Memorandum of Understanding identifying how Carillion can work together with the Government to help re-engineer procurement and service delivery, including changing the scale and scope of outsourced services across a number of our existing contracts.  Following these constructive discussions, Carillion believes that the opportunities to work with both central and local government to deliver greater efficiencies through outsourcing services remain very strong. The outcome of these discussions has no material effect on Carillion's current market guidance.       

Support services - secure and probable orders worth in the region of £190 million

Carillion has been awarded a £25 million, 5-year contract to provide a fully integrated range of hard and soft facilities management services to the Land Registry estate of 37 properties - a good example of how outsourcing can deliver high-quality services and significant cost savings, in line with the Government's objective to reduce running costs.     

A Carillion Joint Venture (50:50) has won support services contracts worth some £80 million over the next five years, including contracts to provide hard and soft facilities management services for Dow and property management services for Enexis.  

In addition, BAA has appointed Carillion as one of three contractors who will together provide mechanical and electrical engineering services and fabric maintenance at Heathrow Airport worth up to £75 million over three years. This appointment further extends Carillion's long-term relationship with BAA for whom it already provides a range of support and construction services.  Carillion is also in single-point negotiation on further integrated facilities managements contracts, notably with customers in the financial services sector, that are expected to generate over £100 million of revenue over the next five years.   

UK Construction - contracts worth £66 million

Carillion has won a £45 million contract to build new, and refurbish existing, accommodation at Whittington Barracks for Defence Estates, on which work will start in September 2011 with completion due in February 2014.  Carillion has also been awarded a £21 million contract by Argent to design and build a social rented and shared equity apartment building as part of The Kings Cross Partnership's £3 billion Kings Cross regeneration scheme.  As a construction partner of Argent, Carillion has already delivered a number of projects for this scheme, for which Carillion's strong capabilities for delivering sustainable solutions are a key requirement.

⁽¹⁾After joint venture taxation and before intangible amortisation, non-recurring operating items and non-operating items.

⁽²⁾ Before intangible amortisation, non-recurring operating items and non-operating items.

Canada - contracts worth £110 million

Carillion has been awarded a £60 million construction management contract to build Phase 2 of the Uptown Shopping Centre in Victoria, British Columbia, having successfully delivered the award winning Phase 1.  Carillion has also won a £51 million contract to build the new Queensway Carlton Hospital in Ottawa and renovate the existing hospital, which reflects Carillion's extensive experience in the Canadian Healthcare sector.    

Commenting, John McDonough, Group Chief Executive, said: "We have made a positive start to 2011, following our strong performance in 2010, for which we expect to report good profit and earnings growth, and year-end net cash of well over £100 million.  New order intake remains healthy and we have secured new orders plus probable orders worth some £350 million. 

"I am also pleased to report that we have signed a Memorandum of Understanding with the UK Government.  We look forward to working with our customers to provide value-for-money services that support their business objectives and with Government customers specifically to improve efficiency and deliver savings that will enable them to reduce running costs."

For further information contact:

John Denning, Director Group Corporate Affairs                 [phone]

Finsbury

James Murgatroyd or Gordon Simpson                            [phone]

Notes to editors

Carillion is one of the UK's leading support services companies with a substantial portfolio of Public Private Partnership projects and extensive construction capabilities.  The Group has annual revenue of over £5 billion, employs around 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

 

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