Carillion sees further construction margin growth

Aaron Morby 13 years ago
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Carillion predicts another year of profit growth at construction division despite the UK slow down.

The firm said it was on track for a planned shrinkage of the construction division with turnover falling from £1.3bn to £600m by 2013.

But this year its expected to generate stronger profits than last as margins improved from a selective approach to the work it bids.

The company said: “In Canada, our markets remain strong, particularly the PPP market, which we continue to expect to be a key driver of growth over the medium term.”

The construction group remains on course to deliver substantial growth in support services from 2012 onwards and to double revenue  in the Middle East and in Canada, in each case to around £1bn, over three to five years.

In the last six weeks since its half-year results, Carillion has signed several framework agreements and preferred bidder deals worth up to £670m.

These comprise local government facilities management, energy services, construction services and rail infrastructure services in the UK, road maintenance services in Canada and construction services in the Middle East.

Also Carillion has sold its equity investment in the A249 Public Private Partnership road project, generating proceeds of £10.6m, taking the total raised from PPP sell-offs this year to £25m.

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