Carillion expects progress despite 'tough' UK

8th Dec 2010 07:13

Contractor and support services specialist Carillion expects good growth in underlying profits this year despite tough market conditions in the UK.Profit growth should more than offset the effects of selling non-core businesses and stakes in Public Private Partnership (PPP) projects in 2009, which chipped in £17m last time.Carillion decided to scale down its construction business by a third in May 2010 over the next three years, which it says will help it cope with the reduction in government capital investment announced in the Spending Review.Total revenue in 2010 is expected to be lower than in 2009 in line reflecting disposals and the reduction in UK construction, though operating margins should improve on last year's 3.8%. Additions to the group's order book this half so far have exceeded £1bn. Discussions with the UK Government over existing contracts with Central Government customers are progressing well and the result is not expected to have a material effect on market guidance, Carillion added. "Although trading conditions are expected to remain difficult, especially in our UK markets, the Group is well positioned to make further progress in 2011," the statement concluded.