Carillion expects the first-half's turnover slippage to continue into the second half as the impact of downsizing its UK construction base more than offsets growth in the support services business. And even though half-year group underlying operating profit – adjusted for exceptionals – rose 8 per cent year-on-year to £80.7m, that backdrop leaves the shares looking up with events.
The group operating margin did rise to 4.1 per cent from 3.3 per cent as management focused on strict cost controls and a more selective approach to the contracts it bids for. The group order book held up well, too, at £18.3bn – although that's down from £19.1bn a year ago – and earnings visibility at the half-year stood at 92 per cent of anticipated revenue for the full year. The pipeline of contract opportunities rose to a record £35.6bn. And while construction services – excluding the Middle East – saw turnover fall by a third to £629.5m, underlying profits here rose 69 per cent to £25.9m. Meanwhile, support services turnover grew 6 per cent, most of which came from the full first-half contribution from Carillion Energy Services.
Peel Hunt expects full-year adjusted pre-tax profit of £211.5m and EPS of 42p (2011: £212m/42.7p).
| CARILLION (CLLN) | ||||
|---|---|---|---|---|
| ORD PRICE: | 273p | MARKET VALUE: | £1.17bn | |
| TOUCH: | 273-274p | 12-MONTH HIGH: | 367p | LOW: 234p |
| DIVIDEND YIELD: | 6.2% | PE RATIO: | 7 | |
| NET ASSET VALUE: | 223p* | NET DEBT: | 12% | |
| Half-year to 30 Jun | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 2.45 | 38.2 | 7.90 | 5.30 |
| 2012 | 2.16 | 64.1 | 13.4 | 5.40 |
| % change | -12 | +68 | +70 | +2 |
Ex-div: 5 Sep Payment: 7 Nov *includes intangible assets of £1.53bn, or 356p a share | ||||
