Carillion, one of the UK’s leading support services company, has published a confident trading update for the first six months of 2009 ahead of announcing its interim results on 27 August 2009.

Carillion said it expected to deliver strong growth in underlying earnings for the first six months of 2009 and was on track to deliver materially enhanced earnings in the full year.

The company’s balance sheet remains robust with net borrowing at the half year expected to reduce substantially to around  £150 million – down from £226.7 million in December 2008.

Alfred McAlpine integration cost savings are also coming through as planned – increasing from £15 million in 2008 to £35 million in 2009 and £50 million per annum in 2010.

Equity investments in Public Private Partnership projects are continuing to generate substantial value for Carillion - sale of two investments in June 2009 generated proceeds of £13.8 million.

Middle East construction services are performing strongly and on track to increase revenue from £464m in 2008 to around £600m by the end of 2009. Construction services outside the Middle East are performing satisfactorily and continue to benefit from a high quality order book and pipeline.

Customer outsourcing creates opportunities

The Wolverhampton-based firm said that support services were continuing to make the largest contribution to the Group’s operating profit and remains an important driver of earnings growth.

In the current economic climate, both public and private sector organisations are increasingly seeking opportunities to reduce operating costs and improve efficiency through outsourcing facilities management and other non-core services. Carillion said that this continued to create opportunities to bid for new contracts and to extend existing contracts.

The company has a high quality order book of some £19.7 billion at 30 June 2009 (December 2008: £20.4 billion) – plus a pipeline of probable new orders worth approximately £2.9 billion (December 2008: £3.1 billion).