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Carillion expects 2010 revenue fall

Carillion has indicated that its total revenue for 2010 is expected to be lower than last year’s figure.

The support services company revealed in a pre-close trading update that, in line with previous guidance, the fall was caused by the sale of non-core business and public private partnership equity investments, the continued slump in UK construction and the company’s continued focus on contract selectivity and financial discipline.

Carillion added, however, that it expected the group’s 2010 overall operating margin to improve compared to last year’s figure of 3.8%.

The statement is for the 12 months to 31 December and comes ahead of Carillion’s preliminary results, which will be released on 2 March, 2011.

At present, the company is managing the delivery of the new £193M Library of Birmingham, the £370M Building Schools for the Future programme in Wolverhampton and the £50M Chiltern Railway improvement project.

A company statement said: “The group continues to perform well, despite tough market conditions in the UK, and expects to deliver continuing good growth in underlying profit before tax and underlying earnings per share.

“Growth in profit is therefore expected to more than offset the effects of selling non-core businesses and equity investments in public private partnership projects in 2009, which together contributed some £17M of underlying profit before tax.

“We are well-positioned to make further progress in 2011 and, over the medium term, to target strong international growth alongside substantial growth in UK support services.

“The results of the spending review were in line with our expectations and are already reflected in our guidance to the market.

“Our discussions with the UK Government in respect of existing contracts with Central Government customers, under its Supplier Engagement Programme, are progressing well and we do not expect the outcome of these discussions to have a material effect on market guidance.”

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