Carillion shares jump on strong revenue growth

Investors appeared more than pleased with Carillion's 2015 results on Thursday, with shares in the facilities management and construction services company experiencing a healthy rise after it posted strong growth amid muted trading.

The FTSE 250 company saw strong revenue growth of 13%, to £4.59bn during the calendar year. 10% of that growth was organic, with the board claiming organic growth across all business segments.

Carillion also reported good growth in underlying profit before tax - up 2% to £176.5m; and underlying earnings per share - up 4% to 35p.

On a reported basis, profit before tax grew 9% to £155.1m. Basic earnings per share were up 10% to 30.9p.

The company's net borrowing reduced to £169.8m as at 31 December, down from £177.3m a year earlier.

Its board also talked up its 'considerable financial strength', saying it had £1.4bn of funding available to support its growth strategy.

"Our performance in 2015 reflects the benefits of our consistent and successful strategy, which enabled us to rescale and reposition our business during the economic downturn in order to take advantage of opportunities for growth as market conditions improve," said Carillion chairman Philip Green.

Green said growth in revenue, underlying profit before taxation and earnings per share was primarily organic, and followed the mobilisation of a number of major new contracts, supplemented by two bolt-on acquisitions - the Rokstad Corporation and the Outland Group.

Both acquisitions had enhanced Carillion's support services business in Canada, Green said.

"With a strong, high-quality order book, a large and growing pipeline of contract opportunities and the financial strength to support our strategy for growth, the Group is well positioned to make further progress in 2016."

During the year, the company reported new orders and probable orders wirth £3.7bn, which was down from 2014's £5.1bn figure, reflecting the anticipated impact of the UK general election in the first half. £2.7bn of the figure came in the second half of the year.

The total value of secured and probable orders was strong, at £17.4bn, down from 2014's £18.6bn. £0.3bn was removed from the order books during the year due to the sale of equity investments in public private partnerships.

Looking at the current year, Carillion said revenue visibility was strong at 84%, in line with the 85% figure a year ago.

The company had been awarded framework agreements worth more than £2bn, which was not yet included in the order book or in probable orders, but would give further revenue growth opportunities.

Its pipeline of specific contract opportunities increased to £41.4bn at year-end, from £39.2bn, in markets offering good growth potential.

Carillion's board proposed a full-year dividend of 18.25p per share, up 3% from 2014's 17.75p.

At 1250 GMT, shares in Carillion were up 4.4% to 291.6p.