REG - Carillion PLC - Half-year Report <Origin Href="QuoteRef">CLLN.L</Origin>

CarillionAnnouncement

29/09/2017 07:08

RNS Number : 2047S
Carillion PLC
29 September 2017
 
 
29September 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 2.5bn
 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 845m for construction contracts
-  Further 200m provision for support services contracts, but minimal impact on cash 
 Goodwill impairment charge of 134m in respect of UK and Canadian construction businesses
 Average net debt in H1 694m 
 New H1 orders plus probable orders of 2.6bn, with total orders plus probables stable at 16bn

H1 2017
H1 2016
Total Underlying Revenue
2,498m
2,487m
Underlying profit from operations
82m
112m
Underlying operating margin1
3.5%
4.9%
Underlying profit before taxation1
50m
85m
Underlying earnings per share1
9.6p
16.0p
(Loss)/profit before taxation
(1,153)m
84m
Basic (loss)/earnings per share
(261.2)p
15.8p
Net debt 
571m
291m
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 75m by mid-2019 
 Actions underway to improve cash flow and strengthen balance sheet
 Expected proceeds from non-core business disposals increased to 300m from 125m 
 Discussions ongoing regarding sales of Carillion's business in Canada and the UK Healthcare business
 Pension deficit reduction of 80m, potential to reduce further by 120m 
 Agreed further 140m 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 4.6bn and 4.8bn (previously 4.8bn to 5.0bn)
 2017 H1/H2 profit split similar to recent years, before 10m of cost savings and business disposals 
 Full-year average net debt expected to be between 825m and 850m
 Estimated further restructuring costs of 75m to 100m 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 200m 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 onwww.carillionplc.comand 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 of1209521#, password'Carillion'.
This announcement contains inside information.
For further information contact:
Institutional Investors and Analysts 
John Denning, Group Corporate Affairs Director
Kellie McAvoy, Head of Investor Relations 
tel: +44 (0) 1902 906333
Media 
Charlie Armitstead/Haya Herbert-Burns 
Teneo Blue Rubicon 
tel: +44 (0) 207 420 3197
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 viewthe 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
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