This year is expected to hold challenges for construction and support services group Carillion. Nevertheless, the business starts 2012 with a robust order book and a growing pipeline, all of which helps underpin the attractions of its high-yielding shares.
While last year's revenues fell marginally, reflecting the acquisition of Eaga and the scaling back of UK construction, a substantial boost to underlying operating margins from 4.2 per cent to 4.7 per cent meant a 13 per cent rise in underlying pre-tax profits to £212m. Meanwhile, the order book was steady at £19.1bn and, encouragingly, given fears about the economic outlook, the contract pipeline rose 29 per cent to £33bn.
Despite support services being the group's long-term growth focus it was construction, excluding the Middle East, that was the star of the year with a 41 per cent jump in operating profits to £57.9m, following a leap in operating margins from 1.9 per cent to 3.1 per cent. In a tough market, the support services business managed to maintain margins and, with the help of the Eaga acquisition, increased profits 9 per cent.
Broker Investec Securities expects pre-tax profit of £231m for 2012, giving EPS of 44.5p (£212m and 43p in 2011).
| Carillion (CLLN) | ||||
|---|---|---|---|---|
| ORD PRICE: | 337p | MARKET VALUE: | £1.4bn | |
| TOUCH: | 336-337 | 12-MONTH HIGH: | 405p | LOW: 281p |
| DIVIDEND YIELD: | 5.0% | PE RATIO: | 11 | |
| NET ASSET VALUE*: | 226p | NET DEBT: | 5% | |
| Year to 31 Dec | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2007 | 3.33 | 94.0 | 27.1 | 11.0 |
| 2008 | 4.44 | 118 | 29.0 | 13.0 |
| 2009 | 4.50 | 136 | 30.5 | 14.6 |
| 2010 | 5.14 | 168 | 36.9 | 15.5 |
| 2011 | 5.05 | 143 | 32.0 | 16.9 |
| % change | -2 | -15 | -13 | +9 |
Ex-div: 16 May Payment: 15 Jun *Includes intangible items of £1.5bn, or 360p a share | ||||
