Carillion expects to report “substantially” higher pre-tax profits for 2012 after scaling down its UK business and focusing on “large, high-quality contracts for long-term customers”.
The firm’s revenues are expected to dip compared with 2011 due to the reduction of its UK business in response to market conditions.
The drop is in line with Carillion’s forecasts, although it predicts a higher margin and “substantially” better earnings per share and profit before tax for 2012.
In an interim results statement released before its official year-end, Carillion predicts growth in 2013 despite challenging conditions thanks to its project pipeline in the UK, Canada and the Middle East.
It expects its pipeline value to exceed the £35 billion previously forecast.
The firm expects its full-year operating margin in non-Middle East construction will remain strong due to its selective approach combined with lower bid costs and overheads in the UK.
Carillion’s investments in public private partnerships have continued to perform well, especially in Canada, while in the UK the firm is shortlisted for the Royal Liverpool Hospital PPP.
The contractor has welcomed the UK’s review of PFI, “as this paves the way for new PPP programmes under the National Infrastructure Plan, including sectors such as schools, prisons and courts, where Carillion has strong track records”.
Separately, the firm announced its acquisition of a 49 per cent stake in Canadian support services group Bouchier for £24 million.
Carillion is set to announce its preliminary full-year results for 2012 on 27 February 2013.
Major contracts won since June:
- Energy services contract for Birmingham City Council, worth up to £1.5bn over eight years
- Two-year extension to £160m Housing Prime contract for the Defence Infrastructure Organisation
- Ten-year strategic partnership with Lancashire County Council initially worth £150m
- Contracts with UK private sector customers worth £100m over the next 10 years
- Two major road schemes worth £200m to be delivered for the Highways Agency in a joint venture: A1(M) upgrade between Leeming and Barton and the A5-M1 link road scheme
- Stockley flyover in Hillingdon, west London, worth £50m under Network Rail’s £2.3bn work programme
- £43m upgrade of Peterborough station including new station footbridge, platform extensions and lifts
- Canada: contracts secured and preferred bidder positions acquired for highways maintenance worth £525m over 12 years, of which about £475m relates to contract renewals
- Middle East: support services contracts worth more than £40m, including Carillion’s first highways maintenance contract – with Qatar – which is worth £36m over five years