Carillion shares fell 1% in early trading following the release of first half results.
Underlying profits before tax were £84.5m, bang in line with the previous year. This was despite revenues increasing 10% to £2.5bn, as a strong performance in Support Services, was largely offset by declines in operating profits in the Public Private Partnerships (PPP) and Middle East Construction divisions, down 25% and 38% respectively.
Support Services, which now accounts for c.60% of group operating profit, saw revenues grow 8% to £1.3bn, with operating profit growing 30% to £75.9m. The division benefitted from a significant margin improvement, up from 4.7% to 5.7%, as 2015's higher-than-normal mobilisation costs, following a particularly strong work winning performance, drop out.
New orders plus probable orders for the first half were £2.5bn, bringing total orders and probable orders to £17.4bn. The group has visibility on 98% of the 2016 revenue target (H115: 96%) with the pipeline of future contract opportunities standing at £41.5bn.
Average net borrowing remains similar to the 2015 full year average, and in line with expectations, with £1.4bn in committed funding available to the group. The dividend increased 2% to 5.8p per share.
Chairman Philip Green commented:
"I am pleased to report that the Group's first-half results are in line with our expectations, led by a strong performance in our support services business... New order intake in the first half of the year has been strong and continues to reflect the success of our strategy and strength of our business model. Overall, we remain on track to make further progress in 2016"
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