Carillion's turnover up 32% to £5.2bn

Carillion has officially become one of the big guns of the UK construction industry with an annual turnover that has broken through the £5bn barrier.

Carillion’s 32% surge in workload reflects the full impact of two big acquisitions of the recent past – Mowlem and Alfred McAlpine.

Latest annual results cover the 12 months to 31 December 2008.

Carillion’s pre-tax profit of £116m was 23% higher than the previous year’s figure of £94m.

Turnover jumped from £4.0bn in 2007 to a record £5.2bn.

Philip Rogerson, chairman, said: “2008 was a strong year. Alfred McAlpine has been successfully integrated. Carillion is a well-balanced and resilient business with a strong balance sheet.”

Rogerson pointed to the anticipation of higher profits in 2009.

Carillion’s forward orderbook runs to £20bn plus a further pipeline of “probable new orders” worth £3.1bn.

Rogerson will leave Carillion in May. He joined the board back in 1999 when the group was formed as a result of the de-merger from Tarmac.

Support Services

Turnover 37% higher at £2.4bn thanks largely to the input from McAlpine.

Public Private Partnership projects

At the end of the period there was a portfolio of 21 equity investments in financially closed PPP projects in which Carillion had spent £57m already and had commitments to a further £88m spend.

Three projects were added to the portfolio during the year while six mature projects gave Carillion the opportunities for a sale – they generated a total of £60m.

To date, Carillion has sold 23 equity stakes over the past five years and the cash proceeds of £179m produced a pre-tax profit of £104m.

Middle East construction

Turnover up to £110m from £100m in 2007.

Construction (excluding the Middle East)

Turnover 26% higher at £2.1bn - again the growth was largely a result of the McAlpine deal in February 2008.

The group’s restructuring costs ran to £58m which was made up of Alfred McAlpine (£55m) and Vanbots Group (£3m). The latter is based in Canada.

The McAlpine acquisition is “delivering better than expected benefits” with integration cost savings expected to reach an annual run rate of £50m by the end of 2009 which is £20m more than at the time of the acquisition.

The one-off cost of delivering these savings has bumped up from £30m to £55m.

The rise in pre-tax profit has triggered a18% climb in the dividend that Carillion will pay to its shareholders.

The average net borrowing in 2007 was £130m while in 2008 the figure was £330m.

At the year-end, Carillion’s net borrowing had fallen to £230m which it said was “better than our target of £300m”.

Carillion continues to fight to get a grip on its pension fund issues.

After an additional cash payment into the pension scheme of £51m following a figure of £46m in the previous year (both sums were called for by the group’s agreed pension deficit recovery plan), the deficit at the end of the period stood at £62m.