A sharp fall in headline profits at Carillion (CLLN) reflected more than the well-flagged downsizing of the UK construction division. While growth here is expected to kick in later this year, underpinned by more infrastructure work, business elsewhere in the group looks mixed.
For example, profits from public-private partnerships (PPPs) jumped 73 per cent to £58.4m last year, but only after a net profit of £44.6m from the sale of its stake in seven projects. This leaves investments of just £53m, which the company values at £68m. There was also disappointment in the energy-services sector, after a squeeze on spending kicked the government's Green Deal campaign into the long grass. That trimmed the order book by £600m and forced Carillion to downsize at a cost of £42.9m. Revenue and underlying profits from the support-services division - which includes facilities management and consultancy as well as the energy business - both fell 2 per cent.
The news was scarcely better abroad. Profits from the Middle East construction business were down by over one-third, as the introduction of competitive tendering trimmed operating margins from 6.1 per cent to 4 per cent.
Prior to these figures, J.P. Morgan was forecasting 2014 underlying pre-tax profits of £182m and EPS of 36p (from £174.7m/34.7p in 2013).
| CARILLION (CLLN) | ||||
|---|---|---|---|---|
| ORD PRICE: | 386p | MARKET VALUE: | £1.66bn | |
| TOUCH: | 385-386p | 12-MONTH HIGH: | 395p | LOW: 240p |
| DIVIDEND YIELD: | 4.5% | PE RATIO: | 17 | |
| NET ASSET VALUE: | 225p* | NET DEBT: | 22% | |
| Year to 31 Dec | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 5.63 | 136 | 30.5 | 14.6 |
| 2010 | 5.14 | 168 | 36.9 | 15.5 |
| 2011 | 5.05 | 143 | 32.0 | 16.9 |
| 2012 | 4.40 | 165 | 34.6 | 17.25 |
| 2013 | 4.08 | 111 | 23.3 | 17.5 |
| % change | -7 | -33 | -33 | +1 |
Ex-div:14 May Payment:13 Jun *Includes intangible assets of £1.55bn or 361p a share | ||||
