Trading Update

Carillion PLC
12 January 2000


Carillion plc trading update

Carillion, the construction, infrastructure management and services group, is
providing this update on trading for the year ended 31 December 1999, in
advance of its preliminary announcement of 14 March 2000.

Following its demerger from Tarmac and subsequent listing on 30 July 1999,
Carillion has continued to build upon its strong recent performance and
consequently the underlying result for the full year is expected to be in line
with the current consensus forecast.   There will, however, be charges against
profits of approximately £2 million to cover a proportion of the expected
accounting expense relating to the Founders Equity Plan announced at the time
of the demerger and approximately £1 million for restructuring costs in the
rail track renewals business.

Strategy

Carillion has made an encouraging start as an independent entity and is now
well-focused on pursuing its strategic priorities of:

Improving operating performance

Repositioning into higher quality earnings sectors such as Infrastructure
Management, Facilities Management and the Private Finance Initiative

Selective disposals

Carillion's management has demonstrated a strong personal commitment to the
success of the strategy by purchasing shares in the company through the
Founders Equity Plan.   A total of 121 directors and other senior managers
have invested £2.6 million under the plan.

Current trading and prospects

Overall trading conditions have been generally healthy with some improvement
during the second half of the year, particularly in the building market where
Carillion is the UK market leader.  Growth in general construction continues
to be tempered by Carillion's strategy of being highly selective in the work
it tenders for.

Early benefits from the process initiated to reduce costs and improve margins
are now beginning to show through.  However net cash is expected to be
slightly lower than that at the same point last year, mainly as a result of
reduced involvement in higher risk turnkey projects in the UK and overseas.

Carillion's overall order book has increased in the second half of the year
and significantly the proportion of longer term business has also increased. 
There have been notable successes in winning new PFI work and the existing 12
concessions are performing well.  Of the six PFI projects on which Carillion
was preferred bidder at the time of the demerger, four have now been secured
and the remaining two, including GCHQ, are near to financial close.

The rail maintenance business remains well positioned having recently won a
number of major new contracts.   The medium term prospects for both rail and
road expenditure now look encouraging and Carillion is well-placed to play a
major part in the recently announced 10 year plan for the modernisation of
Britain's transport infrastructure.

The economies of the UK and of those overseas countries in which Carillion
operates seem set for a period of sustained growth and this, combined with a
new enthusiasm within an independent Carillion, gives considerable confidence
for the future.

Further information

Chris Girling              
Finance Director        
020 7493 2471  (12 January 2000)

John Denning              
Head of Corporate Affairs and Communications
01902 316426