Carillion's delight at £205m boost
Wolverhampton construction services group Carillion today revealed it is performing well and winning new orders both in the UK and in the prime Middle East market – and unveiled more than £200 million of new work.
Wolverhampton construction services group Carillion today revealed it is performing well and winning new orders both in the UK and in the prime Middle East market – and unveiled more than £200 million of new work.
The company says it now makes more money from support services and maintenance than from building and has made a profit of £104 million over the last five years just by selling off 23 invesmtents in Public Private Partnership projects.
In the Middle East alone Carillion expects to make £600 million from a range of projects by the end of 2009.
Today the group was also able to reveal in a statement to the City £205 million of new work – a £125 million deal to build two residential towers in Dubai at the Burj development; £60 million of work on the Al Badai Business Park at Dubai Festival City; and a £20 million deal to build facilities for the Asian Beach Games in Oman.
This follows its announcement yesterday of £100 million of school building work in Essex and rooms for 1,300 students at Aston University in Birmingham.
By concentrating on long-term major developments and public sector work, such as building schools and university facilities and carrying out major accomodation projects for the Ministry of Defence, Carillion has been able to expand massively in recent years and buy out major rivals such as Alfred McAlpine and Mowlem. The company now employs around 800 people at its tower-block headquarters in Birch Street and at Staffordshire House in the Wolverhampton Ring Road. Around the globe it has a workforce around 50,000-strong and annual revenue of £5 billion.
In today's management statement to the City, looking back over the past three months, Carillion boss John McDonough said the group's construction services order book and pipeline of probable new orders "remains strong".
"We continue to expect to achieve strong progress in 2008," he said. And Mr McDonough said Carillion would concentrate on getting better profit margins from its public sector work rather than on simply winning bigger contracts.
At the same time the benefits of acquiring rival builder Alfred McAlpine in February "remain ahead of our expectations".
The enlarged group expects to be able to save £40 million in costs by the end of next year. And a "robust" balance sheet means it is having to borrow less than expected.
The group is also expanding its operations in Canada, which has a £10 billion Public Private Partnership investment programme over the next five years.
Yesterday, Carillion bought Canadian construction management group Vanbots for £14.3 million.
