Don't be concerned about the drop in turnover at Carillion (CLLN) last year. This was almost entirely due to a well-flagged rescaling of the UK construction operations, which saw the group adopting a more selective stance on contract work. And this has paid off because although turnover here fell 31 per cent to £1.28bn, operating profits increased 25 per cent to £72.4m and margins jumped from 3.1 per cent to 5.6 per cent.
And the group as a whole remains in good shape, winning £5.2bn of new and probable orders. True, the order book fell from £19.1bn to £18.1bn, but this was due to the sale of equity investments in some public private partnership (PPP) projects and a smaller contribution from UK construction. Revenue visibility for the coming year, based on secure and probable orders is an impressive 75 per cent of target, and the pipeline of contract opportunities has risen from £33.1bn to £35.2bn. New business continues to come in, with orders of £650m agreed in the first seven weeks of the new financial year. On the support services side, which includes rail, road and utility services, operating profits edged ahead to £122.7m, and operating margins were maintained at 5.2 per cent.