Carillion Plc (CLLN), builder of the 255 million-pound ($400 million) London Olympics media center, said demand for rail, road and power projects is helping to sustain sales even as U.K. construction slows the most in 2 1/2 years.
While Carillion has reduced reliance on government work as public spending is cut, the Wolverhampton, England-based company is seeking ways of bringing delayed projects to fruition, Chief Executive Officer Richard Howson said today in an interview.
“Those contracts will come,” he said. “Right now it’s slow, but we have worked through a number of recessions previously. We anticipated the 30 percent reduction in government spending and we knew the market couldn’t be maintained.”
A gauge of British building output fell to 48.2 last month from 54.4 in May as weaker business conditions sapped demand, according to a survey by Markit Economics. A report yesterday showed factory output shrank for a second month, suggesting the U.K. may still be mired in a double-dip recession.
A decline in Carillion’s first-half revenue was in line with estimates, it said in a statement, with full-year results also likely to match forecasts, aided by expansion in Canada and the Middle East, where the company today announced a 75 million- pound contract with Petroleum Development Oman.
Carillion traded 4.1 percent lower at 270.5 pence as of 9:40 a.m. in London. The stock has declined 10 percent this year, valuing the company at 1.16 billion pounds.
To contact the reporter on this story: Eleanor Lawrie in London at firstname.lastname@example.org
To contact the editor responsible for this story: Chad Thomas at email@example.com