Sharesmagazine
 Home   Log In   Register   Our Services   My Account   Contact   Help 
 Stockwatch   Level 2   Portfolio   Charts   Share Price   Awards   Market Scan   Videos   Broker Notes   Director Deals   Traders' Room 
 Funds   Trades   Terminal   Alerts   Heatmaps   News   Indices   Forward Diary   Forex Prices   Shares Magazine   Investors' Room 
 CFDs   Shares   SIPPs   ISAs   Forex   ETFs   Comparison Tables   Spread Betting 
You are NOT currently logged in
Register now or login to post to this thread.

CARILLION, Bucks The General Trend And Is Looking Strong Going Forward (CLLN)     

goldfinger - 15 Dec 2008 14:32

Chart.aspx?Provider=EODIntra&Code=CLLN&S

Last weeks trading statement from this support/construction business proved what a strong position the company is in.

looks to be plenty of growth going forward.......

RNS Number : 8437J
Carillion PLC
10 December 2008



10 DECEMBER 2008




PRE-CLOSE UPDATE ON TRADING IN 2008

UNDERLYING EARNINGS PER SHARE TO GROW BY 15% SUPPORTED BY ROBUST BALANCE SHEET







Leading UK support services company, Carillon plc, is providing this pre-close update on trading in 2008, ahead of announcing its preliminary results on 4 March 2009.




Highlights




Continuing strong performance supported by a reduction in the Group's underlying effective tax rate to around 20% - underlying earnings per share(1) for the 12 months to 31 December 2008 expected to grow by approximately 15%, some 5% ahead of previous expectations.

Alfred McAlpine successfully integrated with integration and re-organisation cost savings increased by 10 million to a run rate of 50 million per annum by the end of 2009.

Balance sheet remains robust - cash flow remains strong with net borrowing expected to be below 275 million at the year end.

Expect strong revenue growth in support services at margins in excess of the 4.1% achieved in 2007.

Public Private Partnership projects creating significant value - 6 investments sold for 59.7 million in 2008.

Middle East business expected to deliver strong growth with an increasing contribution from projects in Abu Dhabi - margins expected to be at least 6%.

Satisfactory performance in construction services (excluding the Middle East) - operating margin expected to be in excess of the 1% achieved in 2007.

Underlying effective tax rate expected to reduce from 25% to around 20% in 2008 and to remain at this level for the foreseeable future.

.

Business performance




Our results are expected to reflect the strong progress the Group has made in 2008, enhanced by the acquisition of Alfred McAlpine in February 2008. This acquisition created the UK's largest support services business and further increased the Group's resilience, in line with our strategy for growth.




Support services




Support services continues to be a major driver of earnings growth and continues to account for over half the Group's underlying operating profit (1) . Revenue is expected to increase substantially in 2008, primarily reflecting the acquisition of Alfred McAlpine. The operating margin is also expected to increase, within our target range of four to five per cent, largely due to the effect of integration cost savings.










(1) Continuing operations before intangible amortisation, impairment, restructuring costs and non-operating items.










New order intake has remained strong and we continue to have our largest ever pipeline of opportunities for new contracts.




Public Private Partnership (PPP) projects




Our investments in PPP projects continue to generate substantial value. During the year a further six investments in mature projects were sold, generating total cash proceeds of 59.7 million. As indicated in our 2008 Interim Report, this reflected a net present value for the cash flows from these investments based on an average underlying discount rate of under 5.5 per cent. Carillion has now sold a total of 23 mature investments in PPP projects over the last five years, generating cash proceeds of 179 million and a pre-tax profit of 104 million.




We expect to continue to make good progress in this segment. During 2008, we achieved financial close or preferred bidder positions on four further projects in which we expect to invest 11.2 million of equity. In addition, we have a healthy pipeline of potential new projects, including eight projects for which we are currently shortlisted.




Middle East construction services




In Middle East construction services, we expect to report further strong growth in 2008, driven by increased activity levels in Dubai and Oman, together with contributions from Abu Dhabi and Cairo, where we began operations at the beginning of the year. Going forward, we expect growth to be increasingly driven by Abu Dhabi, where we negotiated substantial new work in 2008 worth over 1 billion and also increased our pipeline of potential opportunities.




We therefore continue to expect long-term sustainable growth in this region and remain confident that we will achieve our objective of broadly doubling revenue in this segment from the 2007 level of 337 million to a run rate of over 600 million by the end of 2009, at an operating margin of some six per cent.




Construction services (excluding the Middle East)




In this segment, we remain focused on project selectivity, in line with our objective of increasing margins rather than revenue, in order to improve the combined operating margin for all our construction activities, including the Middle East, towards three per cent over the next three years. This strategy is supported by our substantial, high-quality order book and probable new orders, which provide sufficient visibility for us to be confident of achieving our expectations for 2009.




Following the acquisition in October 2008 of the Vanbots Group, a well established construction management services group in Canada, the integration of this business is progressing to plan. This acquisition has significantly enhanced our ability to provide fully integrated solutions, especially for PPP projects, further strengthening our market leadership in Canada, particularly in the health sector.




Balance sheet




The Group continues to deliver strong cash flow and net borrowing at the year end is expected to be below 275 million and below our target of 300 million.




Taxation




Carillion has been successful in agreeing with the tax authorities certain prior year tax issues and a mechanism for the use in 2008 and beyond of certain tax losses acquired with Alfred McAlpine. Consequently, the Group's effective tax rate is expected to reduce from 25 per cent in 2007 to around 20 per cent in 2008. The Group's ability to maintain its effective tax rate at this level for the foreseeable future will be further underpinned by the UK Government's proposal to exempt UK companies from taxation on foreign earnings from April 2009, announced in its 2008 Pre-Budget Report on 24 November 2008.



Acquisition and integration of Alfred McAlpine




The benefits of acquiring and successfully integrating Alfred McAlpine continue to exceed our expectations. Integration and reorganisation cost savings are now expected to reach an annual run rate of 50 million by the end of 2009, an increase of 10 million on the previously announced run rate of 40 million. Additional cost savings have been identified across most areas of our enlarged business as integration has progressed, notably through the adoption of Carillion's shared central services and the outsourcing and off-shoring of back-office processes. All savings have either been delivered, or firmly secured for delivery, with absolute savings expected to be 15 million in 2008, 35 million in 2009 and 50 million in 2010, an increase of 5 million in 2009 and 10 million in 2010. The one-off cost of delivering these savings will increase from the previously announced figure of 40 million to 55 million.










Outlook




The wider economic background will undoubtedly become increasingly difficult and make delivery of our business objectives more challenging. However, Carillion is a well-balanced and resilient business, with strong positions in its chosen market sectors in the UK, the Middle East and Canada. Therefore, with a robust balance sheet, a strong order book and continuing opportunities in our main market sectors, Carillion continues to expect to build on its strong performance in 2008 and deliver materially enhanced earnings in 2009.




Carillion Chief Executive, John McDonough and Group Finance Director, Richard Adam, will host a conference call on this statement for analysts and investors at 9:00am today, Wednesday 10 December. The telephone number to join the conference call is + 44 (0) 207 190 1232.




For further information contact:




Richard Adam, Group Finance Director + 44 (0) 1902 422431

">Chart.aspx?Provider=EODIntra&Code=CLLN&S

VICTIM - 21 Jul 2017 17:12 - 290 of 398

Thought that might weed him out of his silence , George .

HARRYCAT - 24 Jul 2017 12:11 - 291 of 398

Canaccord comment today:
"Pursuant to Carillion's parlous H1 trading update (£845m contract receivables provision, elevated net debt, dividend suspension, CEO exit, strategic review), we downgrade estimates and reiterate our SELL stance with a revised target price of 20p (from 200p). Notwithstanding a flurry of recent contract awards, which speak loudly to the pedigree and various world-class capabilities and technical competencies which exist within the company, we continue to see material downside in the equity value of the group.
The company is facing a major liquidity crisis which will, in our view, require significant capital restructuring. Successful delivery of the current balance sheet repair initiatives (including augmented recovery of receivables, exit from certain construction markets) may itself be compromised by the perceived funding gap.
An equity based funding solution is likely to prove challenging:
Interests of other stakeholders including banks and pension trustees (net deficit £587m, double the market cap) may impose conditionality.
Lack of permanent CEO turnaround specialist (may not be in situ soon).
Scope for further provisions/write-downs pursuant to EY strategic review (i.e. forecasts not secure and thus scale of funding requirement unclear). A formal update is not scheduled before the interims in (now "late") September.
Given the 80% price destruction over the last two years, current holders may not wish to exercise their pre-emption in which instance the strike price for new shares will be dictated by sub-underwriters and potentially very dilutive. Using a base assumption of a £500m rights issue (2.4x EBITDA, reducing net debt/EBITDA to 1.1x) we model for a spectrum of scenarios from a 7 for 6 at 100p down to a 12 for 1 at 10p, which constitute potential dilution to existing shareholders of between 55% and 93%.
This remains a very binary situation with the equity value highly geared to the quantum of net debt. Should the company over-deliver on the receivables recovery plan within the existing provision alongside its other balance sheet repair measures (by say £100m versus our forecast) then the shares could move back above 100p quite quickly (albeit we are unlikely to gain clarity on progress made before September). Any deterioration versus our admittedly cautious forecast leaves the existing equity value in peril. We expect the next few weeks will see continued price volatility and the net performance outcome could be extreme. Our SELL recommendation and 20p target price (equivalent to a further £200m balance sheet deterioration OR 6 for 1 rights to raise £500m) reflects the balance of risks, as we see them, for equity holders."

hlyeo98 - 24 Jul 2017 13:05 - 292 of 398

I think Canaccord is wrong this time. Carillion is oversold now and with winning 2 out of 3 HS2 contracts and also HESTIA contracts, this is moving up now.

hangon - 24 Jul 2017 15:06 - 293 of 398

I'll agree with that hlyeo88, - - - although in principal I'm against Government ( =us ), investing in likes of HS2 - the ratio Cost/Reward doesn't stack IMHO.
However, I read there is yet another Cross-rail project.... so less competition for CLLN if they aren't involved.
Debt-for-Equity was mentioned somewhere.... what's yr view? Will the Co need a huge lump of cash.....OR.... will these futuristic contracts be re-written, producing modest returns.
How CLLN, or any construction Co. can commit to a fixed-price contract baffles me.... what if they hit something nasty, like Quicksand/Flood/etc. ? - These should be risks the financiers take - since they are taking the Profits into the future.
Also, they have a major hand in the positioning of the project....whereas the Constructor has to follow Plans. . . . I hold a few.
EDIT(28July2017)- HARRYCAT knows there is no dividend likely for maybe 2-years, but even with a 6-for-1 Rights issue ( if Punters were asked ), the potential income "should" be worthwhile . . . but I have issues with Management that got us into this Mess. They have to go... but who is brainy enough to replace???

HARRYCAT - 24 Jul 2017 15:54 - 294 of 398

Currently 31% dividend yield! I can live with that! \o/

Stan - 24 Jul 2017 15:55 - 295 of 398

Oh really..and when "was" it due do you know Harry?

HARRYCAT - 24 Jul 2017 15:57 - 296 of 398

Early May and early September.
I'm in denial Stan.....just tell me what I want to hear!

hlyeo98 - 03 Aug 2017 09:06 - 297 of 398

Deutsche Bank and Citigroup are buying into CLLN now.

CC - 03 Aug 2017 10:54 - 298 of 398

Short interest at 22.17% which has only dropped 3% percent since the fall after they made the £850m provision. In fact it's starting to rise again.

I'm not sure they are out of the woods yet. It's all about whether sub-contractors will want to work for them. I suggest things are fairly precarious until such time as the level of debt starts falling, which is hard to see unless they can generate any profits which they don't seem very good at.

HARRYCAT - 16 Aug 2017 08:25 - 299 of 398

Still approx 22% short interest. Thought it might benefit from the good results from BBY today, but seems not.

Dil - 16 Aug 2017 09:47 - 300 of 398

oi mentor , still getting cheaper.

skinny - 16 Aug 2017 10:23 - 301 of 398

The hook is a bit flatter but...

Chart.aspx?Provider=EODIntra&Code=CLLN&SPretty_fish.gif

CC - 16 Aug 2017 14:21 - 302 of 398

I have no position in CLLN, too risky for me. The short sellers aren't reducing and the share price continues to fall which tells me things are looking pretty grim.

Looks like 50 is going to go any second now.

mentor - 16 Aug 2017 15:33 - 303 of 398

oi Dily

have you see me posting here lately
that should tell you something

if not ask the old 3 leg sheep

Dil - 17 Aug 2017 08:53 - 304 of 398

Yep it tells me you've been clueless on these.

mentor - 17 Aug 2017 09:05 - 305 of 398

WHY ARE YOU SO OBSESSED WITH 'CLUELESS'?

better than the 3 leg sheep

images?q=tbn:ANd9GcRaJFKiQsdUARMEt2r_VuW

Dil - 17 Aug 2017 09:19 - 306 of 398

Lol which one is you ?

Claret Dragon - 23 Aug 2017 10:07 - 307 of 398

A sad demise.

Dil - 23 Aug 2017 10:28 - 308 of 398

Don't worry mate , mentor will be along soon with another buy recommendation.

That'll really feck up them up.

HARRYCAT - 23 Aug 2017 10:29 - 309 of 398

I wonder when the shorters will close out. They still seem relentlessly determined.
Register now or login to post to this thread.