Latest:
Carillion turnaround complete
13:05 17 Sep 2004
|
Carillion chief executive John McDonough said he was satisfied with
the firm's overall performance in the first half of 2004 and that
the group's transformation is now complete.
The sale of M&E subsidiary Crown House to Laing O'Rourke in June marked the end of the process. The result of this departure and various other non-core elements has been to trim £500m-a-year from the annual workload.
The construction division will not be put up for sale. McDonough said: "You can't win large hospitals and the like without a good design and construct capability in-house. We think we are good at that sort of work."
In the past five years, Carillion has boosted its support services activities, which now generate around half the group's turn-
over and more than two-thirds of profit.
Carillion's latest interim results (six months to 30 June) show turnover ahead at £1bn (£930m). There was a pre-tax loss of £19m as a result of an exception hit running to £39m. This one-off charge was itself a blend of various ingredients.
Selling Crown House for £17m generated a £9m profit; there was a further £8m from the sale of PPP equity; and hiving off other fixed assets added another £3m.
Also high on the company's list of priorities was the need to write back £55m of goodwill previously written off to reserves, a move triggered by the sale of Crown House.
"Basically it means that Tarmac overpaid for Crown House back in the 80s when it was bought," said Chris Girling, finance director. "It is not a cash item."
As part of the sale details, Carillion has a framework agreement with O'Rourke for future M&E work and O'Rourke is working on Carillion's hospitals in Oxford and Portsmouth. Both were won prior to the Crown House sale, since when there have been no significant further awards, which might have indicated that M&E work is continuing either to go O'Rourke's way or elsewhere.
Carillion now generates a strong cash flow and currently has £88m of net cash. As with Kier, Carillion is still signing up to forms of construction contracts that are cash positive.
The sale of M&E subsidiary Crown House to Laing O'Rourke in June marked the end of the process. The result of this departure and various other non-core elements has been to trim £500m-a-year from the annual workload.
The construction division will not be put up for sale. McDonough said: "You can't win large hospitals and the like without a good design and construct capability in-house. We think we are good at that sort of work."
In the past five years, Carillion has boosted its support services activities, which now generate around half the group's turn-
ADVERTISEMENT
over and more than two-thirds of profit.
Carillion's latest interim results (six months to 30 June) show turnover ahead at £1bn (£930m). There was a pre-tax loss of £19m as a result of an exception hit running to £39m. This one-off charge was itself a blend of various ingredients.
Selling Crown House for £17m generated a £9m profit; there was a further £8m from the sale of PPP equity; and hiving off other fixed assets added another £3m.
Also high on the company's list of priorities was the need to write back £55m of goodwill previously written off to reserves, a move triggered by the sale of Crown House.
"Basically it means that Tarmac overpaid for Crown House back in the 80s when it was bought," said Chris Girling, finance director. "It is not a cash item."
As part of the sale details, Carillion has a framework agreement with O'Rourke for future M&E work and O'Rourke is working on Carillion's hospitals in Oxford and Portsmouth. Both were won prior to the Crown House sale, since when there have been no significant further awards, which might have indicated that M&E work is continuing either to go O'Rourke's way or elsewhere.
Carillion now generates a strong cash flow and currently has £88m of net cash. As with Kier, Carillion is still signing up to forms of construction contracts that are cash positive.
ADVERTISEMENT
Most Viewed Articles
ADVERTISEMENT