Government outsourcing gives boost to Carillion

SUPPORT services and construction group Carillion posted a 10 per cent rise in first-half profit yesterday, driven by a surge in demand for public sector outsourcing as cash-strapped local authorities looked to cut costs.

The group, which maintains motorways, railways, military bases and telephone lines, said pre-tax profit increased to £72.5m on revenues two per cent lower at £2.45bn. Broker Collins Stewart had forecast £71.1m.

Carillion, which also operates in Canada and the Middle East, said its current order book in addition to probable orders stood at £19.4bn.

“With strong market positions and a record pipeline of contract opportunities, the group continues to target strong international growth and substantial growth in UK support services over the medium term,” chairman Philip Rogerson said .

The group said its chief executive John McDonough will be retiring at the end of 2011, and will be succeeded by current chief operating officer Richard Howson.