CARILLION AND Tarmac reported rising half year profits this week, following the £28M demerger of the aggregates and contracting group earlier this year.
Carillion reported an operating profit up 43% to 14M, while Tarmac announced profits of £68.8M for the first half of 1999, up 12.5%. The demerged companies have been trading as separate entities on the stock market since 30 July.
Carillion chairman Sir Neville Simms announced improved margins from 1.1 to 1.6% in a market swinging away from building and capital projects towards infrastructure management, services and Private Finance Initiative projects.
Profits were up in building (£4.9M), services(4.1M), and infrastructure management (£5.2M) but down in capital projects (£1.1M) and PFI (£1M).
Simms forecast strong growth in road maintenance contracts from local authorities when the Government's Best Value proposals, replacing Compulsory Competitive Tendering, were implem- ented. More outsourcing was expected from a market which had grown to £1.8bn in value.
Tarmac chief executive Roy Harrison forecast more acquisitions for the aggregates group despite £0.5bn debts which included an estimated £100M taken on from the contracting side of the business. Having announced a £48.1M investment on deals to buy two limestone quarries from British Steel and £26M last month for Marley Paving, more would follow, he said.
Efficiency savings from the Tarmac demerger included the sale of the Tarmac helicopter for a reported £300,000 and the imminent £2M sale of the country house HQ Hilton Hall.