Carillion breaks £2bn barrier in six months

Revenue figures at construction and services group Carillion have soared over the £2 billion mark after a string of big contract wins, including the new West Midlands 'super' hospital.

It was revealed earlier this month that a joint venture led by Wolverhampton-based Carillion, called The Hospital Company, will start work next year on the £430 million Midland Metropolitan Hospital in Smethwick.

In its latest half-year report Carillion hailed 'the exceptional volume of new contracts won in 2014' for boosting its revenue by 21 per cent to £2.26 billion, up from £1.87 billion at the same point last year.

And that helped push up underlying pre-tax profits by 11 per cent to £84.5 million, despite the 'substantial' costs of getting new contracts up and running.

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Carillion chairman, Philip Green, said: "I am pleased to report that Carillion has continued to perform in line with expectations, which reflects the actions we took during the economic downturn to position our businesses in markets where we can now achieve revenue growth, consistent with our targets for margins and cash flow.

"We have also made good progress with mobilising a number of major new contracts won in 2014. Therefore, with a strong order book, a growing pipeline of contract opportunities and the prospect of market conditions continuing to improve, our expectations for 2015 and the medium term remain unchanged."

But the pause in awarding public sector contracts in the run-up to the UK General Election cost the company more than £2 billion in the first six months of this year, as it revealed its figure for new orders plus probable orders was down to just £1bn from £3.2bn a year ago.

Despite this it still has £17.1bn of total secure orders plus probable orders. And there is another £2.5bn of work on long term framework contracts.

Although it built its reputation as a builder here in the UK, in Canada and in the Middle East, where it continues to win major contracts, more than half of the company's income is now from services such as maintenance on the buildings it has put up as well as road and rail projects.

On the Midland Metropolitan Hospital project, on land off London Street, Heath Street, Grove Lane, Grove Street and Cape Arm, Carillion will invest around £16 million and expects to earn £297 million from the construction work and then another £140 million in support services over the 30-year life of the contract.

The company employs around 46,000 people worldwide, with 600 based at its Carillion House headquarters in Wolverhampton city centre.

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