Statement re (Mowlem Update)

Carillion PLC
24 April 2006


Carillion plc


Mowlem acquisition

Support services and construction company Carillion plc is providing today an
update on the assessment of fair value adjustments to the net assets of Mowlem
plc, which it acquired on 23 February 2006, and on the cost synergies expected
as a result of integrating the Carillion and Mowlem businesses.

The provisional assessment of fair value and other adjustments to net assets set
out in the announcement of the offer for Mowlem on 14 December has been revised
in association with the completion of Mowlem's 2005 audited accounts. As a
result, goodwill has been increased by £80 million to a total of £474 million.
This has no material impact on expected earnings nor on the Group's net debt
forecasts, also set out in that announcement. Earnings will increase as a result
of increased cost synergy savings.


Fair value adjustments

Since completing the acquisition of Mowlem, it has become clear that prior to
acquisition the position on a small number of large contracts had deteriorated
further, particularly the Dublin Port Tunnel and Exeter Schools projects. As a
result, the provisional fair value adjustment of £45 million relating to
contract write-downs is now expected to increase by a further £90 million. This
reflects a firm view of the expected outturn for these contracts. In the event
that actual write-downs are different from expectations, full visibility will be
provided of the amounts involved.

In addition, there will be a non-cash adjustment of £30 million to cover costs
associated with businesses closed by Mowlem in the second half of 2005 and in
2006 prior to acquisition.

These increases in goodwill are expected to be reduced by £40 million in respect
of a surplus of proceeds over net assets on the disposal of a number of Mowlem
businesses.

Synergy cost savings

Since acquisition, further cost synergies have been identified. Savings by the
end of 2006 are now expected to reach a running rate of £15 million per annum,
£5 million more than previously announced. By the end of 2007, savings are now
expected to reach a running rate of £23 million per annum, £8 million more than
previously announced. Therefore, after a modest additional cost associated with
delivering these additional savings, there will be a further increase in
earnings in addition to the material enhancement in 2007 already expected from
the acquisition.


Cash

Carillion estimated that average net debt in 2006 would be £200 million and peak
net £250 million and that net debt by the end of 2007 would be below £100
million.

The cash effect of the fair value adjustments described above will have no
material impact on these net debt forecasts. Expected proceeds from business
disposals will largely offset the cash effect of the increased contract losses.


For further information contact
John Denning, Director Group Corporate Affairs, Carillion plc 01902 316426




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