Carillion half-year results buoyed by PPP business

UK-listed support services and construction company Carillion has experienced strong revenue and profit growth over the past six months, bolstered by its PPP business.

In a statement to the London Stock Exchange, Carillion revealed its profit before tax for the six months ending June 30 was £51.9 million (€58.9 million; $84 million), up 92 percent on the prior corresponding period. This was on the back of total revenue of £2.7 billion, an increase of 13 percent from the halfway point last year.

PPP business: profit up 23%

Carillion’s PPP business performed strongly during the first half of the year, earning a profit of £16.1 million, rising 23 percent from 2008’s figure. In June the company sold investments in school PPP projects in Exeter and Renfrewshire, generating proceeds of £13.8 million at a discount rate of 8 percent. Following the sales, Carillion had sold a total of 25 PPP projects generating a pre-tax profit of £107 million.

Carillion retains a portfolio of 21 PPP projects which have reached financial close, in which it has committed £148.2 million of total equity and which its directors valued at £177 million at the half-year. With a PPP forward order book of £5.1 billion and probable orders of £200 million, Carillion said it expects the outlook for PPP projects to remain positive, highlighting the UK and Canadian markets as particularly fertile ground.

The firm’s construction services operations in the Middle East grew at an even greater rate, contributing profit for the half year of £24.9 million – a 90 percent increase over the previous year. Carillion’s support services and non-Middle East construction services businesses both improved on last year’s figures, albeit to a lesser extent, rising by 10 percent to £42.9 million and by 1 percent to £10.9 million respectively.

Carillion proposed an interim dividend of 4.6p per share, up 12 percent on last year’s proposed dividend.