Upbeat Carillion sizes up £35.6bn worth of potential contracts

The Wolverhampton-based support services firm, which employs 45,000 people worldwide, said it had £35.6bn worth of contracts to play for, having picked up £2.2bn of business in the first half of 2012.

This included a five-year facilities management contract worth £45m for the Ministry of Defence and a three-year contract for Direct Line Group.

It highlighted a “significant number” of local authority contracts as councils look to save cash, while its workload should also be boosted by the UK Government’s £250bn, five-year National Infrastructure Plan.

Carillion, which is supporting BT’s Openreach division in the roll-out of superfast broadband, has scaled back construction work due to the current economic climate, meaning the division’s revenues dropped by a third to £631.6m.

But with construction margins improving due to more selective workloads, group underlying profits rose 1 per cent to £73.1m in a “robust” half-year performance.

Shares rose 1 per cent after the group, which maintains some of Britain’s railways and military bases, said it remains on-track to hit full-year expectations.

Other first-half wins included a £700m contract to provide property and facilities management services for Oxfordshire County Council and a managed motorways contract for the Highways Agency, worth £62m.

Its support services division saw revenues growth of 6 per cent, helped by last year’s £306m acquisition of Newcastle-based Eaga, one of the UK’s biggest suppliers of heating and renewable energy services.

Carillion’s construction business in the Middle East saw a 21 per cent drop in revenues amid a slowdown in contract awards in Abu Dhabi.

It has bid on £3.5bn worth of pending work this year in the Middle East and said it had won a construction project in Oman worth over £100m, but that it would not name the client for another few weeks.

It remains confident that revenues will hit £1bn in 2015, meaning they will have doubled over five years.

Caroline de La Soujeole, an analyst at Seymour Pierce, said the results were “a touch better” than she had expected and was pleasantly surprised by the underlying growth in its support services business.

She expects underlying profits of £217.4m for the full year, up from £212m the previous year.