Carillion aims to win more Midlands work

Chief executive of the Wolverhampton-based construction and support services group Richard Howson said Carillion saw better prospects in this country and particularly in the Midlands and north of England.

"It has become easier to win work in the Midlands than abroad," he said.

"We have found in the last 18 months that the construction sectors in Birmingham and Manchester in particular have been particularly strong and we have been winning good quality work with customers with which we have worked for many years in both cities.

"We have moved the emphasis away from London which has become over heated and difficult to source labour in," explained Mr Howson.

"80 per cent of our new orders work for support services is from customers we have worked with before which underlines our service delivery and customer experience.

"In construction 70 per cent of new work is with existing customers," added Mr Howson, who said that 82 per cent of this year's work was in hand.

"We are sharpening our focus strategically in to areas where we can have the greatest certainty of winning work.

"The UK infrastructure economy is more appealing than Canada or the Middle East with the prolonged low oil price affecting our ability to win work at the level we ant to win at.

"instead we will employ resources in to the UK where we see 10 to 15 years of investment in infrastructure and outsourcing and better opportunities for us," he explained.

Carillion's infrastricture work has already included Smart Motorway work around Birmimngham and a new project on the M60 around Manchester.

"The electrification of the Midlands main railway line will also bring in up to £500 million for Carillion over the next five years," added Mr Howson.

Carillion is also involved in major construction projects in the West Midlands conurbation including the Paradise Circus project in Birmingham city centre for Argent and the Midland Metropolitan Hospital at Smethwick.

It is also delivering £225m of schools under public private partnerships around the Midlands.

Carillion saw a fall in pre-tax profits of five per cent to £155.1m despite a 14 per cent rise in revenue for 2016 to £5.21 billion, which was driven by support services, which contributed more than two-thirds of total operating profit and more than offset expected reductions in profit from public private partnership projects and Middle East construction services.

Carillion won £4.8bn on new and probable orders last year compared to £3.7bn in 2015 and has a high-quality order book worth £16bn and a strong pipeline of contract opportunities worth £41.6bn.

Mr Howson said the company was very pleased with the level of orders, which were a good platform to develop the business looking forward.

Carillion employs around 48,500 people and operates across the UK, in the Middle East and Canada, including nearly 500 directly in the West Midlands with another more than 1,000 in the supply chain.