CARILLION signalled better times ahead in the construction sector as it announced that a scaling back in its UK building activities was “largely complete” and said the division was set for a return to revenue growth.
The Wolverhampton-based support services group began shrinking its British construction arm in 2010 as it looked to other markets for expansion amid tough conditions at home.
Revenues from the division have broadly halved over the past two and a half years and a further 20 per cent fall to £503.8m for the first six months of this year was part of the planned cutting back, the company said.
But it added: “We believe that rescaling is now largely complete and expect second-half revenue in this segment to be higher than the first half.”
Recent new orders include a £400m contract at Battersea Power Station and £335m worth of construction work as part of a public-private partnership (PPP) at Royal Liverpool Hospital.
Carillion said the shrinking of UK construction was the main reason for the nine per cent dip in half-year revenues to £1.96bn for the wider group, compared with a year earlier. It said it expected some opportunities for medium term growth, but that the market remained challenging.
Underlying pre-tax profits at Carillion – which employs 40,000 people and operates across the UK, Canada and the Middle East – were up two per cent to £73.5m in the first six months of 2013.
Carillion’s bottom line was bolstered by the sale of its investments in PPPs for £113m, although this contributed to falling revenues.