The result was improved margins, with underlying profit from operation up 2% to £232.4m (2011: £227.4m).
The total operating margin increased from 4.9% to 5.7%.
Reported pre-tax profit rose 26% to £179.5m (2011: £142.8m) and basic earnings per share increased by 16 % to 37.2 pence.
After picking and choosing its contracts more carefully, Carillion’s revenue from UK construction in 2012 was scaled back to £900m. By being more selective in bidding for work and focusing closely on cost and profit, a stronger business has been created, Carillion said, and one that can now look to grow all over again but from a position of strength.
In the words of the board:
“Our performance has continued to benefit from taking a highly selective approach to the contracts for which we bid, lower bid costs, a rigorous focus on cost management and positive settlements on contracts reaching completion. Clearly, some of these benefits arise only because we have been rescaling our UK business. But we believe our strategy has not only increased profitability during the period of rescaling, but created a stronger business, capable of delivering higher margins than the industry average, as we begin to target revenue growth going forward.”
Construction contracts that Carillion did choose to chase during the year – with success – included:
- £250m-worth of Highways Agency work
- a £45m contract to reconfigure Pier 5 at Gatwick Airport
- a £42 million contract for Argent in Manchester
- £40m-worth of academy schools contracts.
Since the year end, Carillion has also been awarded a £115m contract to upgrade the A465 in Wales.
Carillion chairman Philip Rogerson said the company was on course to achieve its targets of delivering annual growth in support services and of growing annual revenues in the Middle East and in Canada, in each case to around £1bn, by 2015.
He said: "Carillion has continued to deliver a robust performance, with underlying earnings per share slightly ahead of the market consensus forecast. Having rescaled our UK construction activities, we have also further improved the risk profile and the overall quality of our business.”
Key financial figures
|
2012 |
2011 As restated(1) |
2011 Change from restated |
2011 As previously reported |
||
|
Income statement |
|||||
|
Total revenue |
£bn |
4.4 |
5.1 |
-13% |
5.1 |
|
Underlying profit from operations |
£m |
232.4 |
227.4 |
+2% |
215.9 |
|
Total Group underlying operating margin |
Percentage |
5.7 |
4.9 |
n/a |
4.7 |
|
Support services underlying operating margin |
Percentage |
5.2 |
5.2 |
n/a |
5.2 |
|
Middle East construction services underlying operating margin |
Percentage |
6.1 |
8.9 |
n/a |
8.9 |
|
Construction services (excluding the Middle East) underlying operating margin |
Percentage |
5.6 |
3.1 |
n/a |
3.1 |
|
Underlying profit before taxation |
£m |
214.7 |
223.5 |
-4% |
212.0 |
|
Profit before taxation |
£m |
179.5 |
142.8 |
+26% |
142.8 |
|
Underlying earnings per share |
Pence |
43.0 |
45.7 |
-6% |
43.0 |
|
Basic earnings per share |
Pence |
37.2 |
32.0 |
+16% |
32.0 |
|
Dividends |
|||||
|
Proposed full year dividend per share |
Pence |
17.25 |
16.9 |
+2% |
16.9 |
|
Underlying proposed dividend cover |
Times |
2.5 |
2.7 |
n/a |
2.5 |
|
Basic proposed dividend cover |
Times |
2.2 |
1.9 |
n/a |
1.9 |
|
Cash flow statement |
|||||
|
Cash generated from operations |
£m |
97.9 |
255.5 |
-62% |
230.3 |
|
Underlying profit from operations cash conversion |
Percentage |
42.1 |
112.4 |
n/a |
106.7 |
|
Deficit pension contributions |
£m |
30.2 |
36.2 |
-17% |
36.2 |
|
Balance sheet |
|||||
|
Net borrowing |
£m |
(155.8) |
(50.7) |
-207% |
(50.7) |
|
Committed borrowing facility to 2016 |
£m |
737.5 |
737.5 |
- |
737.5 |
|
Private placement borrowings maturing between 2017 and 2024 |
£m |
310.0 |
100.0 |
n/a |
100.0 |
|
Net retirement benefit liability (net of taxation) |
£m |
269.9 |
229.3 |
+18% |
229.3 |
|
Net assets |
£m |
1,009.5 |
982.5 |
+3% |
982.5 |
|
(1) |
From 2012 onwards profits from the sale of equity investments in Public Private Partnership (PPP) projects are treated as part of underlying profit, instead of non-operating profit, in line with normal industry practice. PPP equity sales contributed £11.5m in 2011 and £13.2m in 2012. |
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