Carillion Plc (CLLN), builder of the 255 million-pound ($400 million) London Olympics media center, said infrastructure project decisions due by year-end will help offset a first-half slowdown that led to a decline in sales.
Revenue fell 12 percent to 2.16 billion pounds ($3.4 billion), the Wolverhampton, England-based company said in a statement. Underlying pretax profit increased 1 percent to 73.1 million pounds excluding goodwill amortization, missing the average 75.86 million pounds estimated by five analysts.
A slow-down in construction projects in Europe has driven Carillion to scale back operations in its home market and pursue business overseas. Spending in some of those markets has been slow in the first six month as well, though.
“There has been some indecision in the first half from customers and we expect those decisions to be made in the second half,” Richard Howson said today in an interview. The company has 92 percent of full-year revenue plans secured or in the pipeline, he said, with many bids in play in the U.K., Middle East and Canada.
The company sees 35.6 billion pounds in contract opportunities in its three core markets. That figure is 2.5 billion pounds higher than six months ago.
Howson also expects Middle East activity to pick up now that the Ramadan holiday has ended. Carillion has already booked a yet-to-be-announced contract in the region valued at more than 100 million pounds, he said.
Howson, six months into his tenure as chief executive, has reorganized the business, including cutting the number of units to six from eight and shifting the focus to operational performance. Further changes may be made, he said, but none are immediately planned.
The company’s global footprint may also expand. “We have got confidence to expand in time,” he said. New locations are being looked at, he said, without identifying them.
Carillion also is waiting for the outcome of a U.K. government review of its policy on private finance initiatives. The outcome is due by year-end. “It is time the privately financed initiative was changed,” Howson said. “We advocate the Canadian model where procurement times are reduced and the leadership of the procurement of public sector contracts is more centralized.”
Carillion shares were little changed at 268.90 pence at 8:45 a.m. in London trading. The company share price is down 11 percent year-to-date, valuing Carillion at 1.16 billion pounds.
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