Contractor Carillion is predicting strong growth by year end, according to a trading statement for the third quarter of 2009.
In a statement to the City, the ststement said the group was: “on track to deliver materially enhanced earnings in 2009, despite challenging market conditions.”
It planned to reduce borrowing to below £146M by year end.
Support Services, the company’s largest sector, is said to be braving the downturn well thanks to efficiency savings from the takeover of Alfred McAlpine, which is expected to: “more than offset the effects of increased competition.”
PPP investment remained high, with 22 projects reaching financial closed and £152.8M invested..
Middle East activity was strong, despite the continuing economic problems in Dubai. “In the Middle East we continue to benefit from our strategy of geographic diversification within the region, which has increased the resilience of our business and kept it on track to increase its share of revenue from the region to around £600M in 2009, compared with £464M in 2008.
“As reported at the half year, revenue growth in Abu Dhabi has been particularly strong and we are also making good progress in Oman, which together will more than offset the expected reduction in revenue from Dubai. Operating margins are expected to be in excess of 6% in 2009.”
In the rest of the world, revenue shrank in the UK but this was offset by increases in the Canadian market due to the acquisition of the Vanbots Group in October 2008.
Summing up, the company said: “Although we expect our markets to remain challenging, the Group has a resilient business mix, a strong order book and substantial pipelines of probable new orders and contract opportunities. Consequently, the Group expects to achieve its objective of delivering materially enhanced earnings in 2009. ”
Shares in Carillion rose more than 6% in early trading.