Carillion says outlook for 2013 is unchanged, strong order pipeline

Construction firm Carillion on Wednesday told investors that despite market conditions continuing to be challenging, its expectations for 2013 remain unchanged.

The group said it has seen a continuation of new orders and probable orders in the year-to-date of more than £1.6bn.

The firm also revealed it has been selected by National Grid as one of six framework contractors to deliver its £1.5bn sub-station construction programme over the next five years.

The deal follows Carillion's appointment as one of four framework contractors that will support the National Grid's £3.2bn programme to renew and refurbish high voltage overhead line cables over the next eight years.

Speaking at Wednesday's annual general meeting, Chairman Philip Rogerson said: "As expected, revenue in the first half of 2013 is likely to be lower than in the corresponding period in 2012, primarily because the rescaling of our UK construction activities resulted in the group having a lower revenue run-rate. However, having achieved this rescaling over the past two years by being selective in terms of the contracts for which we bid, we now have a higher quality UK construction business, which is targeting revenue growth consistent with our selective approach of focusing on national construction projects and long-term customers, in order to achieve our target margins.

"In 2013, the contribution to group profit from support services, Middle East construction services and construction services (excluding the Middle East) is expected to be second-half weighted. However, profit from Public Private Partnership projects is expected to be weighted towards the first half of the year, due to the timing of equity sales.

"The group's balance sheet remains strong and we continue to target cash-backed profit in 2013, after adjusting for the final phase of the working capital outflow arising from rescaling UK construction, in line with previous guidance."

As such, the group's expectations for 2013 and medium-term targets for growth remain unchanged.

The share price rose 3.32% to 277.10p by 12:50.

NR