Carillion lifted by less cyclical support services

Without the slowdown last year's general election caused in contract awards by the UK government, new and probable new orders for support services picked up to £1.6bn from just £0.6bn in the previous comparable period. Operating margins also increased a percentage point to 5.7 per cent here, freed of high contract mobilisation costs incurred last year.

The benefits of re-scaling the UK construction business to reduce overheads and bidding costs helped offset a decline in Canadian sales. Excluding the Middle East operations, underlying operating profits grew 7 per cent to £21m. However, underlying operating profits in the Middle East declined more than a third to below £12m. Chief executive Richard Howson says the group has become more selective in the work it chooses to undertake, trying for example to carry out work using British export finance, where the UK government provides a degree of funding in return for the use of UK materials and services abroad.

Analysts at Peel Hunt expect adjusted pre-tax profits of £182m for the year ending December 2016 and EPS of 34.7p (£177m and 31.8p in 2015).