Carillion (CLLN) brought forward the release of these half-year figures and - at the request of the Takeover Panel - also published the relevant material relating to its proposed (and rejected) offer for Balfour Beatty (BBY).
These reveal that Carillion has identified cost savings from a merger of at least £175m a year by end-2016, with around 40 per cent of these being achieved in 2015. However, a deal will also incur one-off exceptional cash costs of around £225m. Carillion proposed that Balfour's shareholders would receive an additional 8.5p a share dividend, too. As the proposal has been rejected by Balfour, and in accordance with the takeover code, Carillion has until 21 August to make a further approach or announce its intention to withdraw.
Operationally, meanwhile, Carillion's is now benefiting from a completed restructuring of its UK construction division. The most positive effect has been on cash generation, which jumped from just 5 per cent of underlying operating profit to 127 per cent. Net debt also fell by £11.6m in the half to £203.6m, despite having paid last year's final dividend of nearly £52m. In addition, a more selective approach on work contracted helped lift the operating margin from 5.1 per cent to 5.5 per cent.
Broker Investec Securities expects full-year adjusted pre-tax profit of £179m and EPS of 34.5p (from £175m and 34p in 2013).
| CARILLION (CLLN) | ||||
|---|---|---|---|---|
| ORD PRICE: | 331p | MARKET VALUE: | £1.42bn | |
| TOUCH: | 331-332p | 12-MONTH HIGH: | 395p | LOW: 279p |
| DIVIDEND YIELD: | 5.3% | PE RATIO: | 14 | |
| NET ASSET VALUE: | 221p* | NET DEBT: | 21% | |
| Half-year to 30 Jun | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 1.96 | 64.2 | 13.0 | 5.5 |
| 2014 | 1.87 | 67.5 | 13.2 | 5.6 |
| % change | -5 | +5 | +2 | +2 |
Ex-div: 3 Sep Payment: 5 Nov *Includes intangible assets of £1.54bn, or 359p a share | ||||
