TIDMCLLN
RNS Number : 2047S
Carillion PLC
29 September 2017
29 September 2017
Financial results for the six months ended 30 June 2017
Strategic and operational review update
Carillion plc ("Carillion", the "Group" or the "Company")
announces its H1 results and an update on its strategic review.
H1 financial performance weaker
-- Total revenue flat at GBP2.5bn
-- Underlying pre-tax profit down 40% due to:
- The phasing of PPP equity disposals; and
- The trading of contracts with H1 provisions at zero margin
-- Contracts review finalised:
- No change to previously announced provision of GBP845m for construction contracts
- Further GBP200m provision for support services contracts, but minimal impact on cash
-- Goodwill impairment charge of GBP134m in respect of UK and Canadian construction businesses
-- Average net debt in H1 GBP694m
-- New H1 orders plus probable orders of GBP2.6bn, with total
orders plus probables stable at GBP16bn
H1 2017 H1 2016
-------------------------------- ------------ ----------
Total Underlying Revenue GBP2,498m GBP2,487m
-------------------------------- ------------ ----------
Underlying profit from GBP82m GBP112m
operations
-------------------------------- ------------ ----------
Underlying operating margin(1) 3.5% 4.9%
-------------------------------- ------------ ----------
Underlying profit before GBP50m GBP85m
taxation(1)
-------------------------------- ------------ ----------
Underlying earnings per
share(1) 9.6p 16.0p
-------------------------------- ------------ ----------
(Loss)/profit before taxation GBP(1,153)m GBP84m
-------------------------------- ------------ ----------
Basic (loss)/earnings
per share (261.2)p 15.8p
-------------------------------- ------------ ----------
Net debt GBP571m GBP291m
-------------------------------- ------------ ----------
Strategic review and balance sheet update
-- Business refocused on core strengths and markets - support
services, infrastructure and building
-- New leadership team and operating model - delayered
structure, greater accountability and transparency
-- Initial cost reduction target of GBP75m by mid-2019
-- Actions underway to improve cash flow and strengthen balance sheet
-- Expected proceeds from non-core business disposals increased to GBP300m from GBP125m
-- Discussions ongoing regarding sales of Carillion's business
in Canada and the UK Healthcare business
-- Pension deficit reduction of GBP80m, potential to reduce further by GBP120m
-- Agreed further GBP140m committed facility with a number of banks
Revised full-year outlook
-- Full-year results to be lower than current market expectations
-- Total revenue expected to be between GBP4.6bn and GBP4.8bn
(previously GBP4.8bn to GBP5.0bn)
-- 2017 H1/H2 profit split similar to recent years, before
GBP10m of cost savings and business disposals
-- Full-year average net debt expected to be between GBP825m and GBP850m
-- Estimated further restructuring costs of GBP75m to GBP100m in H2.
Commenting Keith Cochrane, Interim Chief Executive, said:
"This is a disappointing set of results which reflects the
issues we flagged in July and the additional GBP200m provision for
our Support Services business that we have announced today. We now
expect results for the full year to be lower than current market
expectations.
"The Strategic Review that we launched in July has enabled us to
get a firm handle on the Group's problems and we have implemented a
clear plan to address them. Our objective is to be a lower risk,
lower cost, higher quality business generating sustainable cash
backed earnings. In the immediate short term, our focus is to
complete the disposal programme, accelerate our action to take cost
out of the business and get our balance sheet back to a place where
it can support Carillion going forward.
"No one is in any doubt of the challenge that lies ahead. We
have made an encouraging start and the ambition is there to build
on that progress. At the heart of this company, there is a strong
core. Supported by an operating model that manages risk much more
effectively and led by a fresh management team with a mandate to
drive cultural change, I am confident that a strong business can
emerge."
A presentation for institutional investors and analysts will be
held today starting at 09:00. The presentation will be webcast live
on www.carillionplc.com and subsequently available on demand. A
dial-in facility is also available on 0808 109 0700 (UK Toll Free)
or +44 (0) 20 3003 2666 (Standard International Access) with a
participant pin code of 1209521# and a password of ' Carillion'. A
replay facility will be available for 7 days on +44 (0) 20 8196
1998 with an access code of 1209521#, password 'Carillion'.
This announcement contains inside information.
For further information contact:
Institutional Investors and Analysts
John Denning, Group Corporate tel: +44 (0) 1902 906333
Affairs Director
Kellie McAvoy, Head of Investor
Relations
Media
Charlie Armitstead/Haya Herbert-Burns tel: +44 (0) 207 420 3197
Teneo Blue Rubicon
29 September 2017
This and other Carillion news releases can be found at
www.carillionplc.com.
Cautionary statement
This announcement may contain indications of likely future
developments and other forward-looking statements that are subject
to risk factors associated with, among other things, the economic
and business circumstances occurring from time to time in the
countries, sectors and business segments in which the Group
operates. These and other factors could adversely affect the
Group's results, strategy and prospects. Forward-looking statements
involve risks, uncertainties and assumptions. They relate to events
and/or depend on circumstances in the future which could cause
actual results and outcomes to differ materially from those
currently anticipated. No obligation is assumed to update any
forward-looking statements, whether as a result of new information,
future events or otherwise.
To view the full Interim Results please click on the link
below
http://www.rns-pdf.londonstockexchange.com/rns/2047S_1-2017-9-29.pdf
This information is provided by RNS
The company news service from the London Stock Exchange
END
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