Carillion's pre-tax profit hit by tram cost overruns

Cost overruns on Carillion's Nottingham Express Transit project have seen the group's interim pre-tax profit slashed by £10m.

Figures for the six months ended 30 June show a pre-tax profit drop of 39% to £10.5m (2002: £17.2m) before goodwill, exceptional items and £10m additional costs on the light railway scheme.

Carillion said problems on the scheme were associated with delivering the infrastructure and its integration with other elements of the system.

The group said it was now progressing in line with the revised costs.

Total turnover for Carillion rose by 4.5% to £933m, with increased turnover in business services more than offsetting a reduction in construction services which saw  turnover fall 10% to £475.5m from £533.8m in 2002.

The division also made an operating loss of £7.9m compared to a £1.6m profit in the previous year.

An increase in rail support services work and road maintenance saw turnover at the business services arm rise 11% to £442.5m for the period.

Carillion chairman Sir Neville Simms said: "The trading conditions experienced in the first half of 2003 are expected to continue in the second half."