Carillion profits surge on reduced turnover
Published: 24 August, 2011
LONDON: Carillion's construction turnover has dropped 10% in line with selective bidding in the downturn but has boosted operating profits in the first six months of the year.
The contractor said that its ability to be selective and avoid bidding for low margin work was particularly important at a time when the UK market is becoming increasingly competitive as the government progressively implements substantial cuts in public spending on construction.
As a result operating profit at the division, which excludes Middle East operations but encompasses work in Canada, jumped 26% to £15.3m on turnover of £950m.
Group-wide underlying pre-tax profit rose 10% to £72m on turnover marginally down at £2.5bn. This helped Carillion lift group margins to from 3.1 to 3,3%.
In the UK in 2011 Carillion expects to see a further improvement in the full-year operating margin, which was 1.9% in 2010, and to deliver growth in operating profit, despite the expected reduction in overall revenue.