2014 First half financial report

RNS Number : 0900P

Carillion PLC

14 August 2014

Half-yearly financial report for the six months ended 30 June 2014

Performance in line with expectations with work winning remaining strong

	Six months ended 30 June 2014	Six months ended 30 June 2013	Change
Revenue	£1,871.0m	£1,964.6m	-5%
Underlying profit from operations⁽¹⁾	£97.4m	£92.3m	+6%
Underlying operating margin⁽¹⁾	5.5%	5.1%	n/a
Underlying profit before taxation⁽¹⁾	£75.9m	£73.5m	+3%
Underlying earnings per share⁽¹⁾	14.7p	14.7p	-
Profit before taxation	£67.5m	£64.2m	+5%
Basic earnings per share	13.2p	13.0p	+2%
Interim dividend per share	5.6p	5.5p	+2%
Underlying profit from operations cash conversion⁽¹⁾	127%	5%	n/a

· First-half financial performance in line with expectations

- As expected, first-half revenue slightly lower, but well positioned to target revenue growth in the full year

- Underlying operating margin⁽¹⁾ increased to 5.5% (2013: 5.1%)

- Underlying profit before taxation⁽¹⁾ up three per cent to £75.9 million, despite a higher net financial expense

- Underlying earnings per share⁽¹⁾ maintained at 14.7 pence

- Strong cash flow with underlying operating cash conversion⁽¹⁾ of 127% (2013: 5%)

- Net borrowing at 30 June 2014 of £203.6 million (31 December 2013: £215.2 million; 30 June 2013: £270.8 million)

- Strong balance sheet, with over £1.1 billion of committed borrowing facilities and private placement funding

· Work winning remains strong

- £3.2 billion of new orders and probable orders in the first half

- Total orders plus probable orders increased to £19.5 billion at 30 June 2014 (31 December 2013: £18.0 billion)

- Pipeline of contract opportunities increased to £38.0 billion (31 December 2013: £37.5 billion)

- 93% revenue visibility⁽²⁾ for 2014 (2013: 93%)

· Interim dividend increased by 2% to 5.6p (2013: 5.5p)

· Full-year targets for revenue growth unchanged, despite markets remaining challenging

(1)	The underlying results stated above are based on the definitions included in the key financial figures on page 3.
(2)	Based on expected revenue and secure and probable orders, which exclude variable work and re-bids.

Carillion Chairman, Philip Green, commented:

"Carillion continues to perform in line with the Board's expectations, reflecting the benefits of the early actions we took in response to the economic downturn, notably the planned rescaling of our UK construction business, together with our continuing strong work-winning performance. Having realigned our businesses to the size of the markets in which we operate, the Group is well positioned to benefit from its strong work-winning performance over the last 18 months and from its high-quality pipeline of contract opportunities across our target markets. Consequently, the Board's expectations for 2014 remain unchanged and we expect to make further progress in the medium term."

There will be a presentation for analysts and investors today at 09.00am. A telephone dial in facility tel: +44(0)20 3003 2666 - Access Code: Carillion Analyst Presentation will be available for analysts and investors who are unable to attend the presentation. The presentation can be viewed on Carillion's website at www.carillionplc.com/investors/investors_presentations.asp.

For further information contact:

Richard Adam, Group Finance Director

John Denning, Group Corporate Affairs Director

Finsbury - James Murgatroyd and Gordon Simpson

tel: +44 (0) 1902 422431

tel: +44 (0) 20 7251 3801

14 August 2014

Notes to Editors:

Carillion is a leading integrated support services company with a substantial portfolio of Public Private Partnership projects, extensive construction capabilities and a sector leading ability to deliver sustainable solutions. The Group had annual revenue in 2013 of some £4.1 billion, employs around 41,000 people and operates across the UK, in the Middle East and Canada.

The Group has four business segments:

Support services - this includes facilities management, facilities services, energy services, utility services, road maintenance, rail services and consultancy businesses in the UK, Canada and the Middle East.

Public Private Partnership (PPP) projects - this includes investing activities in PPP projects for Government buildings and infrastructure mainly in the Defence, Health, Education, Transport and Secure accommodation sectors in the UK and Canada.

Middle East construction services - this includes building and civil engineering activities in the Middle East.

Construction services(excluding the Middle East) - this includes building, civil engineering and developments activities in the UK and construction activities in Canada.

This and other Carillion news releases can be found at www.carillionplc.com

Photographs:

High resolution photographs are available free of charge to the media at www.newscast.co.uk telephone + 44 (0) 208 886 5895.

Cautionary statement

This announcement may contain indications of likely future developments and other forward-looking statements that are subject to risk factors associated with, among other things, the economic and business circumstances occurring from time to time in the countries, sectors and business segments in which the Group operates. These and other factors could adversely affect the Group's results, strategy and prospects. Forward-looking statements involve risks, uncertainties and assumptions. They relate to events and/or depend on circumstances in the future which could cause actual results and outcomes to differ materially from those currently anticipated. No obligation is assumed to update any forward-looking statements, whether as a result of new information, future events or otherwise.

Key financial figures

		2014	2013	Change
Income statement
Total revenue	£m	1,871.0	1,964.6	-5%
Underlying profit from operations⁽¹⁾	£m	97.4	92.3	+6%
Total Group underlying operating margin⁽²⁾	Percentage	5.5	5.1	n/a
Support services underlying operating margin⁽²⁾	Percentage	5.0	4.0	n/a
Middle East construction services underlying operating margin⁽²⁾	Percentage	6.2	4.5	n/a
Construction services (excluding the Middle East) underlying operating margin⁽²⁾	Percentage	4.2	3.8	n/a
Underlying profit before taxation⁽³⁾	£m	75.9	73.5	+3%
Profit before taxation	£m	67.5	64.2	+5%
Underlying earnings per share⁽⁴⁾	Pence	14.7	14.7	-
Basic earnings per share	Pence	13.2	13.0	+2%
Dividends
Proposed interim dividend per share	Pence	5.6	5.5	+2%
Underlying proposed dividend cover⁽⁴⁾	Times	2.6	2.7	n/a
Basic proposed dividend cover	Times	2.4	2.4	n/a
Cash flow statement
Cash generated from operations⁽⁵⁾	£m	123.5	5.0	+2,370%
Underlying profit from operations cash conversion	Percentage	126.8	5.4	n/a
Deficit pension contributions	£m	(19.1)	(19.2)	+1%
Balance sheet
Net borrowing	£m	(203.6)	(270.8)	+25%
Committed borrowing facilities (£785 million maturing in 2018)	£m	850.0	802.5	+6%
Private placement borrowings maturing between 2017 and 2024 (£135 million and US$ 280 million)	£m	298.7	310.0	-4%
Net retirement benefit liability (net of taxation)	£m	(304.7)	(283.8)	-7%
Net assets⁽⁶⁾	£m	968.7	1,001.6	-3%

(1)	After Joint Ventures net financial expense of £3.9 million (2013: £4.8 million) and Joint Ventures taxation charge of £1.1 million (2013: £2.3 million) and before intangible amortisation of £8.4 million (2013: £9.3 million).
(2)	Before Joint Ventures net financial expense, Joint Ventures taxation charge and intangible amortisation.
(3)	After Joint Ventures taxation charge and before intangible amortisation.
(4)	Before intangible amortisation.
(5)	Before pension deficit recovery payments and rationalisation costs and after proceeds on the disposal of Public Private Partnership equity investments and dividends received from Joint Ventures.
(6)	2013 restated for the retrospective adjustment to provisional amounts recognised on the acquisition of the Bouchier Group in 2012.