PRE-CLOSE TRADING UPDATE
"CARILLION TO DELIVER ROBUST FULL-YEAR PERFORMANCE AS EXPECTED"
Carillion is providing this pre-close update on trading in the 12 months to 31 December 2012, ahead of announcing its preliminary results on 27 February 2013.
Carillion expects to deliver a robust financial performance in 2012, with growth in operating profit despite market conditions remaining challenging. As guided, revenue will be lower than in 2011, due principally to the planned re-scaling of UK construction, but the Group's total operating margin is expected to increase as the overall quality of our business continues to improve.
Underlying earnings per share are expected to be broadly in line with market expectations. From 2012, profit from selling equity investments in Public Private Partnership (PPP) projects will be treated as part of underlying operating profit, (previously treated as non-operating); although this is not expected to have a material effect on underlying earnings per share, it is expected to move underlying earnings per share slightly ahead of the market consensus forecast for 2012.
Reported profit before tax and earnings per share are expected to increase substantially.
The Group continues to have a strong balance sheet, with year-end net debt expected to be slightly above the half-year position of £115 million. We have continued our strategy of diversifying the mix of our borrowing facilities with the addition of further private placement funding of some £175 million, which expires between 2017 and 2024, at an average interest rate of 4.75%. This takes the Group's total committed borrowing facilities and private placements to over £1billion.
The value of orders and probable orders at the year end is expected to be broadly similar to the half-year position, after allowing for the effect of selling further PPP equity investments. We continue to be opportunity rich in markets that support our targets for growth and we expect the value of our pipeline of potential contract opportunities to be slightly higher at the year end than the £35 billion previously reported.
