Earnings rise for Carillion despite public spending cuts

Jul 7 2010 by Graeme Brown, Birmingham Post

Construction firm Carillion has predicted an increase in earnings this year despite tough market conditions.

The Wolverhampton-based group, which is heavily involved with the Building Schools for the Future scheme which has suffered heavy cuts, said its support services arm actually stood to benefit from a fall in public sector spending.

Carillion said public private partnership (PPP) projects continued to generate “substantial value” and it expected to maintain a positive net cash position for the first six months of 2010

It said: “In the first six months of 2010, the group has continued to perform well despite market conditions remaining challenging. Underlying earnings per share are expected to increase, more than offsetting the effects of disposing of two non-core businesses.”

Last month the company sold its investments in the Queen Alexandra Hospital PPP project in Portsmouth to HSBC Infrastructure Company Limited for £31.3.

It added: “Cuts in public expenditure ... are in line with our plans for reducing the size of our UK construction business and have the potential to create opportunities for our largest business, support services, over the medium term.”