Carillion's government deal won't harm guidance

31st Jan 2011 07:04

Carillion has won contracts worth around £350m this year and the contractor and support services firm has reached agreement with the UK government about how best to help it save money.Talks with coalition politicians have led to a Memorandum of Understanding being signed, identifying how Carillion can work with the government to help re-engineer procurement and service delivery, including altering a number of existing contracts. "Following these constructive discussions, Carillion believes that the opportunities to work with both central and local government to deliver greater efficiencies through outsourcing services remain very strong," said the group, which reassures there'll be no material effect on Carillion's current market guidance. The company enjoyed a "strong" 2010, with good growth in underlying profit before tax and underlying earnings per share, and year-end net cash of well over £100m, and it's been a good start to 2011 in terms of new business.Carillion has signed a £25m, five-year contract with the Land Registry, plus a further £80m of support services deals via a 50:50 joint venture.A contract with BAA will see the company do £75m of mechanical and electrical engineering services and fabric maintenance work at Heathrow over the next three years. It will get £45m for rebuilding Whittington Barracks for Defence Estates, and £21m from Argent to design and build a social rented and shared equity apartment building as part of the Kings Cross regeneration scheme. There's a further £110m of contracts won in Canada to build a shoping centre and new hospital."We look forward to working with our customers to provide value-for-money services that support their business objectives and with government customers specifically to improve efficiency and deliver savings that will enable them to reduce running costs," said boss John McDonough.