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Carillion brushed aside the current economic gloom and pushed underlying pre-tax profits ahead by 59 per cent to £53.6m. The UK's leading support services group benefited from its diverse revenue stream - which includes management and services in rail, roads, building and civil engineering, as well as a substantial portfolio of public private partnership (PPP) projects.
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All this adds up to a lot of work, and the order book grew 25 per cent to £20bn with another £4.1bn of probable new orders in the pipeline, "which have a 90 per cent chance of translating into firm orders", according to finance director Richard Adam. Turnover has also been boosted by the successful integration of Alfred McAlpine, which was completed in February. Projected integration cost savings of £30m a year have now been revised up to £40m a year by 2010. Savings in 2008 will be £15m, although this is offset by a one-off charge of £40m that will be booked this year.
Citigroup expects full-year pre-tax profits of £153.6m and EPS of 31.5p (£101.8m and 28.6p in 2007).
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| CARILLION (CLLN) | ||||
|---|---|---|---|---|
| ORD PRICE: | 338p | MARKET VALUE: | £1,337m | |
| TOUCH: | 337-338p | 12-MONTH HIGH: | 433p | LOW: 275p |
| DIVIDEND YIELD: | 3.4% | PE RATIO: | 11 | |
| NET ASSET VALUE: | 213p* | NET DEBT: | 31% | |
| Half-year to 30 Jun |
Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2007 | 1.90 | 19.0 | 5.70 | 3.50 |
| 2008 | 2.41 | 27.0 | 7.00 | 4.10 |
| % change | +27 | +42 | +23 | +17 |
Ex-div: 3 Sep Payment: 7 Nov *Includes intangible assets of £1.28bn, or 323p a share |
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Carillion's shares are down from our buy tip (432p 1 June 2007). But the company has a bulging order book, very strong cashflow and relatively little debt, so we reiterate that earlier advice. Buy.
Last IC view: Buy, 387p 3 Apr 2008
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