Carillion Says Its On Track To Make Progress In 2010

7th Jul 2010 07:41

By Jonathan Buck Of DOW JONES NEWSWIRES LONDON (Dow Jones)--Support services and construction group Carillion PLC (CLLN.LN) Wednesday said it expected to post an increase in first-half earnings despite challenging market conditions, and that it remains on track to make further progress in the second half of 2010. The company in a trading update said that future revenue visibility remained strong, with some 97% of expected full-year revenue in 2010 covered by the order book and probable orders. At the end of the first half, the value of Carillion's order book and probable orders was expected to be similar to the level at Dec. 31, 2009, of GBP19.7 billion despite the GBP500 million sale of its equity investment in the Queen Alexandra Hospital public private partnership project. Only GBP500 million of that total amount is expected to relate to probable orders from the public sector, Carillion added, making it resilient to any potential U.K. government cuts in this area. "We anticipate that the U.K. government's recent announcement concerning the Building Schools for the Future program will not have a material impact on the group's order book and probable orders," it said, adding that the lower level of spending was in line with its expectations. Carillion has been reducing the size of its U.K. construction business to focus on opportunities in support services, which now generate more than half of the group's operating profit. First-half earnings per share are expected to increase, the company said, more than offsetting the effects of the disposal of two non-core businesses that contributed some GBP14 million of profit in the same period a year ago. Revenue is expected to be lower, primarily as a result of the disposals and equity sales in 2009, the timing of project starts and completions in the Middle East, and the effect of focusing on margins rather than revenue. Carillion said it expects to maintain a positive net cash position at June 30. It will report interim results Aug. 26. Its shares closed Tuesday at 314 pence. The stock has gained 6.2% in value since the start of 2010. -By Jonathan Buck, Dow Jones Newswires; +44 (0)207 842 9237; [email protected] (END) Dow Jones Newswires July 07, 2010 02:41 ET (06:41 GMT)