Construction and support services group Carillion’s full-year results to December 2015 showed strong returns with revenue up 13%, rising to £4.6bn, in line with expectations.
The firm’s strong performance was attributed to the group’s PPP investments combined with general revenue growth, which helped to raise pretax profits 9% to £155m.
According to the group, new orders and probable orders were worth £3.7bn, compared to £5.1bn in 2014. Carillion said that this reduction reflected the impact of the UK general election in the first half of 2015, with £2.7bn secured in the second half of the year.
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It added that a pipeline of “specific contract opportunities” being tracked by the company stood at £41.4bn, up from £39.2bn in 2014.
Carillion said that the markets were offering good growth potential, and the company was in a strong position going into 2016.
Philip Green, chairman of Carillion, said: “With a strong, high-quality order book, a large and growing pipeline of contract opportunities and the financial strength to support our strategy for growth, the group is well positioned to make further progress in 2016.”
Contractor Costain also released its results earlier this week, where revenue increased 18.2% to £1.3bn during the year, with underlying operating profit improving 16% to £33.2m.
The company attributed its success to focusing on blue chip clients, as well as significant growth in the rail and highways sectors through long-term frameworks.
Parts of the business had a difficult year, however, with Costain’s Natural Resources division in particular getting bruised, plunging £10.8m into the red after being hit by further costs on the Greater Manchester Waste PFI contract. This has run into a number of problems and delays since being awarded in 2007.
“Our order book has reached a new record level of £3.9bn, providing good forward visibility. Our success is the direct result of our ‘Engineering Tomorrow’ strategy, with focused organic growth and targeted acquisition.”
David Allvey, Costain
The division’s performance was also impacted by the decline in oil prices, which resulted in delays in customer spending on North Sea projects. Turnover for the division slid to £318m from £354m previously.
However, overall the group stated that it was positive about the coming year, with chairman David Allvey commenting: “We have again delivered a strong performance with growth in both revenue and profit. Our order book has reached a new record level of £3.9bn, providing good forward visibility. Our success is the direct result of our ‘Engineering Tomorrow’ strategy, with focused organic growth and targeted acquisition.
“We further reinforced Costain’s position as a Tier 1 supplier providing the broad range of innovative integrated services demanded by our major customers who are spending billions of pounds enhancing the UK’s energy, water and transportation infrastructures,” he added.
