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

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StockMarketWire.com
Cantor Fitzgerald has upgraded its recommendation on support services group Carillion (LON:CLLN) to "buy" from "hold" following a good start to the year and believing top-line pressures are showing signs of abating. The broker went on to state that the company looks in much better shape than it has in the past and is encouraged by a number of recent contract wins which provides investors with good revenue visibility. Analysts also reckon cash flow performance should start to improve during 2014 and beyond, having been negatively impacted by restructuring costs associated with its UK construction business. In terms of the stock's valuation, Cantor said: "In our view, Carillion is attractively valued compared to a blended construction / facilities management peer group (c.20% discount) and offers one of the highest dividend yields in the sector." The broker has increased its target price to 420 pence per share (from 350 pence), implying around 15 per cent potential upside.

A most welcome rise today, but it's hard to believe that one upgrade could have such an impact on the market.

Ex-divi wed 14th May (12p)

At Carillion plc's Annual General Meeting today, Chairman, Philip Rogerson, made the following comments on the Group's performance.

"Trading in the year to date is in line with our expectations and work winning has remained healthy.

"We continue to expect the Group to resume revenue growth in 2014, including the resumption of revenue growth in UK construction in the full year. As indicated when we announced our 2013 results, the Group's first-half revenue is likely to be slightly lower than in the first half of 2013, primarily because the planned rescaling of our UK construction activities continued throughout 2013, which resulted in the Group having a lower revenue run-rate at the year end.

"Being very selective in terms of the contracts for which we bid remains central to our strategy for supporting margins, which continue to be in line with our expectations. The investments we make in Public Private Partnership projects are also performing in line with our expectations. As previously indicated, the first-half and full-year contributions to Group profit from these investments will be lower than in 2013, because we plan to sell fewer investments in both periods in 2014.

"We continue to expect the Group to deliver cash-backed profit in 2014 and to return to positive net cash generation, with a consequent reduction in net borrowing at the year end. At the half year, net borrowing is expected to increase, compared with the position at 31 December 2013, primarily because payment of the final dividend in respect of 2013 will be made in June 2014. We continue to expect average net borrowing to fall in both the first half and full year.

"Work winning has continued to be healthy with £1.5 billion of new orders and probable orders in the year to date. Notable successes in support services include signing contracts for Royal Bank of Scotland, Arqiva and Canadian Natural Resources that together are worth £370 million. We have also been selected as the preferred bidder by the Nottingham University Hospitals NHS Trust for a support services contract worth approximately £200 million and as one of four framework contractors to deliver a £2 billion electrification programme for Network Rail. In the Middle East, we have signed contracts to build the Hard Rock Hotel in Abu Dhabi, Phase 1 of the Dubai World Trade Centre and Phase 2 of The Avenue Citywalk development in Dubai that together are worth £320 million. In addition, our pipeline of contract opportunities remains strong.

"In summary, although markets continue to be challenging, our expectations for 2014 remain unchanged. Furthermore, we believe the Group remains well positioned for the future as the medium-term outlook across our markets continues to improve."

StockMarketWire.com
Carillion has been selected as one of three preferred partners to deliver plain line track for Network Rail.

The regions in which Carillion will deliver renewals include the Midlands into the North West, and from Kings Cross to the North East of England.

This work is expected to be worth approximately £100m to Carillion over the five year period for which we expect to sign the contract in June.

Carillion joint ventures selected by the Defence Infrastructure Organisation for two Next Generation Estate contracts potentially worth up to £1.7 billion including additional services and extensions.

These contracts form part of the Defence Infrastructure Organisation's (DIO) Next Generation Estate Contracts programme to maintain and upgrade Defence infrastructure.

A Joint Venture between Carillion and Amey (67:33) has been awarded the National Prime Housing contract that is estimated by MoD to be worth in the order of £625 million over the initial five-year contract period, which can be extended by a further five years subject to approval.

Under this contract the Joint Venture will provide a wide range of hard facilities management services, including routine maintenance, occupancy management, furniture installation, energy efficiency services, statutory inspections and improvements for more than 49,000 military homes throughout the UK. This enlarged contract replaces the contract currently held by a Carillion and Amey Joint Venture under which it delivers similar services for military houses in England and Wales.

A Carillion and Amey (50:50) Joint Venture has been awarded the Scotland and Northern Ireland Regional Prime contract that is estimated by MoD to be worth in the order of £150 million over the initial contract period of five years, which can be extended by a further five years, subject to approval.

Under this contract, the Joint Venture will provide a wide range of hard facilities and asset management services across 30 key sites including RAF Lossiemouth, RAF Leuchars, Kinloss Barracks, HMS Caledonia and Kentigern House in Scotland, and Aldergrove Airfield, Thiepval Barracks and Kinnegar Logistics Base in Northern Ireland, together with the provision of new buildings. Hard facilities management services will include planned and reactive building fabric and mechanical and electrical engineering maintenance, together with utility efficiency services. The service delivery model has also been designed to support the UK Government's objective of encouraging the use of Small and Medium-sized Enterprises.

Both Carillion and Amey will also use these new contracts to create further opportunities to demonstrate their commitment to the Armed Forces Corporate Covenant, which helps ex-service personnel find employment and supports the provision of Reservists.

Carillion Chief Executive, Richard Howson, said: "We are delighted that our Joint Ventures have been selected for these major contracts. We look forward to building on the strong relationship we have developed with Defence Infrastructure Organisation and to working closely with DIO to deliver further improvements to the quality and energy efficiency of the Defence estate."

StockMarketWire.com
Carillion and its joint venture business, Al Futtaim Carillion, have signed, or been selected as the preferred bidder for, contracts in the United Arab Emirates and Saudi Arabia that are worth in total £400m.

In Dubai, Al Futtaim Carillion has signed contracts to build two major luxury hotels that together are worth approximately £300m.

These include Phase IV of the Madinat Jumeirah Resort project that will involve the construction of a luxury 435-room hotel resort for the Dubai-based hotel company Jumeirah Group. This prestigious project, which will be located on a beach-front site next to the famous Burj Al Arab hotel, will be built to world-class standards with high-quality finishes throughout and will include a number of restaurants and leisure facilities.

Construction of both hotels will begin shortly and are scheduled for completion in 2016. These hotels were classified as probable orders in Carillion's interim management statement on 7 May. In addition, Carillion and Al Futtaim Carillion have signed contracts for, or been selected as the preferred bidder for, a number of construction projects in Dubai and in the Kingdom of Saudi Arabia in the healthcare, retail, leisure and residential sectors. Carillion chief executive Richard Howson said: "These latest contract successes continue to reflect the improving outlook in most of our Middle East markets. This includes Dubai, where we continue to see clear signs of recovery with more opportunities coming to market for which our capabilities and reputation for delivering to high standards of quality, safety and reliability are important to customers."

Carillion Joint Venture appointed to £260 million Midlands Highway Alliance framework

The Midlands Highway Alliance is a collaborative arrangement between 20 Local Authorities that gives its members quick, standardised access to high-quality professional services for their civil engineering and highway schemes.

Carillion in joint venture with Lafarge Tarmac (50:50) has been selected as one of the contractors to deliver the Medium Schemes Framework 2, which has a total value of approximately £260 million over a three-year period and an estimated value to the joint venture of £100 million. The Alliance also has the option to extend the framework by a further year to June 2018.

The framework will include the delivery of a wide range of projects on behalf of the Alliance partners, including the reconfiguration of highway layouts, the construction of road and bridgeworks, resurfacing and associated enabling works.

StockMarketWire.com
The Connect Roads consortium comprising Carillion, Balfour Beatty and Galliford Try has been appointed as the preferred bidder to finance, design build and operate the Aberdeen Western Peripheral Route/ Balmedie to Tipperty project (AWPR/B-T). This project, which is estimated to be in the region of £745m, is being delivered in partnership by Transport Scotland, Aberdeen City Council and Aberdeenshire Council and is being procured under the Scottish Government's Non-Profit Distribution (NPD) model. The AWPR project, includes the design and construction of 46km of new dual carriageway between Stonehaven and Charleston, in the south, and Blackdog in the north and a further 12km of upgraded existing dual carriageway between Blackdog and Tipperty.

The contract will also include the construction of 40 kilometres of new side roads, 30 kilometres of access tracks and 72 new bridges, including two significant focal point bridges over the rivers Dee and Don.

Carillion expects to invest up to £20 million of equity (one third share) in the project and to have a one third share of the construction revenue. Following the completion of construction in 2018, the route will be managed and maintained by Connect Roads for 30 years.

StockMarketWire.com
Carillion Saudi Arabia has signed a contract with the Aldara Medical Corporation to deliver phase II of the Aldara Hospital and Medical Centre in Riyadh, Saudi Arabia. This is expected to have a construction value of approximately £70m.

The new facility will be a state of the art hospital and the largest outpatient centre in the Kingdom of Saudi Arabia and will provide some of the most advanced medical services in the world.

It is strategically located in Riyadh close to the King Faisal Specialist Hospital and Research Centre and also Al Faisal University. The Aldara Hospital and Medical Centre is being built to address growing demand for high-quality health care in Riyadh, the Kingdom of Saudi Arabia and in the wider GCC region.

It will employ world-class medical staff, have an advanced IT platform, adopt the latest medical innovations and have leading-edge facilities for training and education. It is also expected to stimulate employment in the health care sector, offering opportunities for Saudi professionals to work in a leading, innovative facility.

Carillion selected as a partner by the Highways Agency for £184 million smart motorway contract and signs a £200 million support services contract with Nottingham University Hospitals NHS Trust

Highways Agency smart motorway scheme
Carillion has been selected by the Highways Agency as one of four contractors, together with Balfour Beatty, Costain and a BAM Nuttall/Morgan Sindall Joint Venture, who will transform 17 miles of the M60 and M62 into a 'smart motorway'. The scheme will use a range of innovative technologies, combined with new operating procedures, to control traffic flow actively. This includes variable mandatory speed limits and opening up the hard shoulder to traffic to reduce congestion and improve journey times and safety.

Carillion is one of the Highways Agency's four delivery partners on the Agency's National Major Projects Framework and this latest award follows the successful delivery by Carillion of four previous phases of the smart motorway programme on the M6 in the West Midlands. This latest scheme will be managed through a collaboration agreement under which the delivery partners will be able to share knowledge and best practice. Work on the scheme is scheduled to begin in July and be completed by Autumn 2017.

Trading Statement

First-half highlights

· First-half performance in line with expectations and full-year targets unchanged
· First-half revenue expected to be slightly lower, as previously announced, but on track to resume revenue growth in the full year
· First-half underlying earnings in line with expectations, with a slightly improved operating margin
· New order intake remains strong, with first-half orders and probable orders of £2.7 billion
· Cash flow expected to be strong with profit fully cash-backed and average net debt reducing

Liverpool Football Club Main Stand Expansion £75m

Carillion appointed preferred bidder for Liverpool Football Club's Main Stand Expansion and the associated public realm improvements, estimated to be worth in the region of £75 million

Carillion has been selected as the preferred bidder to expand Liverpool Football Club's Main Stand and the associated public realm improvements. Work on the project is expected to start later in 2014, subject to planning consent. It is expected to take approximately 20 months to complete and the construction costs are likely to be in the region of £75 million.

If planning permission is granted, the proposals would see the capacity of a new Main Stand rise by approximately 8,300, taking the overall capacity of Anfield to around 54,000.

Investec has reassessed it neutral recommendation on the construction group Carillion [LON:CLLN] and reckons it is now time to get off the fence.

In doing so it has gone to buy.

Admittedly with a 380p a share valuation that doesn’t leave much upside for the stock.

In its note to clients, Investec said: “We have been neutral for some time on Carillion, with concerns over cash and Middle East margins at the fore.

“However, the group has had a positive start to the year in terms of new contract wins and the net debt position is now likely to be better than we expect.”

It reckons the shares look like good value on just under 10 times 2014 earnings, underpinned by a secure and growing dividend.

“Whilst headline growth is likely to be muted in the near term, we believe numbers have now troughed and therefore upgrade to buy,” the broker added.

StockMarketWire.com
Carillion's joint venture with Amey has signed contracts with the Defence Infrastructure Organisation for a further three Next Generation Estate Contracts potentially worth up to £2.8bn including additional services and extensions. These three contracts form the final part of the Defence Infrastructure Organisation's (DIO) Next Generation Estate Contracts (NGEC) programme to maintain and upgrade defence infrastructure.

This announcement completes the NGEC facilities management contract awards programme and follows the announcement on 12 May that Carillion and Amey joint ventures had won the National Housing Prime contract and the Scotland and Northern Ireland Regional Prime contract.

The five NGECs won by the Carillion and Amey joint ventures have a total potential value of £4.5 bn.

A Carillion joint venture with Amey has been awarded the Regional Prime Central contract that is estimated by MoD to be worth in the order of £435 million over the initial contract period of five years, which can be extended by a further five years, subject to approval. This enlarged contract replaces the existing Regional Prime Contract Central, which is currently held by a Carillion joint venture with Amey and covers central and northern England and the whole of Wales, and the existing Regional Prime Contract East, as services in all these areas are being combined into one contract. Under this contract, the joint venture will provide a wide range of hard facilities and asset management services at more than 150 establishments containing more than 14,000 assets at sites including RAF Cranwell, Catterick Garrison, RAF Valley and MoD Stafford, together with the option to undertake capital works projects valued up to £3.93 million. Hard facilities management services will include planned and reactive building fabric and mechanical and electrical engineering maintenance and utility efficiency services. The Carillion joint venture has also been awarded the South East and South West Regional Prime contracts that are estimated by MoD to be worth in the order of £258 million and £265 million, respectively, over the initial contract period of five years. The South East contract will provide hard facilities and asset management services at 60 key sites, including Sandhurst, Horse Guards, HQ Land Andover and RAF Northolt. The South West contract will provide hard facilities and asset management services at 40 key sites, including RNAS Yeovilton, DE&S Abbey Wood, RAF Lyneham and Britannia Naval College. At DE&S Abbey Wood and the UK Hydrographic Office, the joint venture will provide a Total Facilities Management service, including catering, cleaning and other soft facilities management services in addition to hard services, which will be delivered by an in-house Carillion Amey team. All three contracts, together with the contract in Scotland and Northern Ireland, which was announced on 12 May, will deploy a service delivery model for hard facilities management services that will support the UK Government's objective of encouraging the use of Small and Medium-sized Enterprises. Both Carillion and Amey will also use these new contracts to create further opportunities to demonstrate their commitment to the Armed Forces Corporate Covenant, which helps ex-service personnel find employment and supports the provision of Reservists.

Possible Merger
In view of recent media speculation the Boards of Carillion and Balfour Beatty can confirm that, following an approach from Carillion to Balfour Beatty, they are engaged in preliminary discussions in relation to a possible merger of Carillion and Balfour Beatty.

The Boards of Carillion and Balfour Beatty believe that the merger of the two groups has the potential to create a market leading services, investments, and construction business of considerable depth and scale. Work is now underway to develop a strategy and outline business plan for a combined entity, underpinned by the evaluation of achievable synergies, future financing arrangements and a number of other essential supporting workstreams. In evaluating the merits of the merger, the two boards will, inter alia, wish to be satisfied that such a merger would lead to very significant value creation for the benefit of both sets of shareholders.

The two parties have agreed that Balfour Beatty's publicly announced sale process for Parsons Brinckerhoff, which is already underway, will proceed unaffected by this announcement, subject to achieving acceptable value and terms.

The Boards of Carillion and Balfour Beatty note that they would only proceed with a merger if, inter alia, (i) both Carillion and Balfour Beatty were to conclude due diligence to their satisfaction; and (ii) the Boards of Carillion and Balfour Beatty were to recommend it to their shareholders. In accordance with Rule 2.5(c)(i) of the Code, Carillion and Balfour Beatty confirm that the pre-conditions referenced in (i) and (ii) above must be satisfied prior to the agreement of any transaction.

No final decision has been reached regarding the structure of any merger. Accordingly until further notice, for the purposes of the Code, both Balfour Beatty and Carillion will be treated as offeree companies.

glad i have these in my sipp though sold them from my trading portfolio a few weeks back, which is a bit of a shame

Shares in construction companies Carillion and Balfour Beatty soar on amid tie-up talk


Published: 08:36, 25 July 2014 | Updated: 20:33, 25 July 2014


Shares in two of Britain’s biggest construction firms soared yesterday amid talks of a merger to create a national champion worth more than £3billion.


Carillion, which recently won the contract to redevelop Liverpool FC’s Anfield Stadium, and Balfour Beatty, the builder of the aquatics centre at the London 2012 Olympics, said ‘preliminary discussions’ about a deal are underway.


The news sent shares in both companies soaring with Carillion up 7.2 per cent, or 24.3p, to 362.8p and Balfour up over 9 per cent, or 21p, to 253.1p.




The rally pushed the combined value of the groups to £1.3billion – enough to propel a merged group into the FTSE 100 index – with Carillion worth £1.55billion and Balfour £1.75billion.

Although Balfour is the larger of the two firms, and has a turnover of £10billion to Carillion’s £4billion, Carillion made the approach and is more likely to be the senior partner.


Balfour, which was founded in 1909 and has 40,000 staff, has been rocked by project delays and a string of profits warnings.




Shares lost a third of their value between March and early July and chief executive Andrew McNaughton was ousted in May after just 14 months in the job.


The company is now run by executive chairman Steve Marshall, the former Railtrack boss, and is in the process of offloading US design consultancy Parsons Brinckerhoff in an attempt to shore up its finances.


Carillion, which also has around 40,000 staff, has seen its shares rise by a quarter since December.


Chief executive Richard Howson is expected to run the combined company if the deal goes ahead.


The two sides said the combination has the potential to create a support services and construction business of ‘considerable depth and scale’.


They also said a deal would not affect the sale of Parsons.
Analysts at Liberum said a tie-up between Carillion and Balfour ‘could be the deal of this decade’.

Why the drop? Has the merger talks fallen through?

Here's a clue - Termination of Merger Discussions

Termination of merger discussions by Balfour Beatty plc ('Balfour Beatty') with Carillion plc ('Carillion')

Balfour Beatty announces that it is terminating discussions with Carillion regarding a possible merger with immediate effect. The termination of discussions follows Carillion's wholly unexpected decision to only progress the possible merger in the event that Parsons Brinckerhoff remained part of the potential combined entity. This change is contrary to the basis upon which the Balfour Beatty Board agreed to engage in preliminary discussions. It is also contrary to the joint announcement released on 24 July 2014 which confirmed that the sale of Parsons Brinckerhoff would be unaffected by the merger discussions and also a presentation to Balfour Beatty's Board by Carillion on 28 July 2014. This change in the proposed terms is not acceptable to the Board of Balfour Beatty.

Balfour Beatty will proceed in accordance with its own business plan, including the competitive sale process of Parsons Brinckerhoff currently well underway. It will also continue to actively progress its search for a Group CEO.

Balfour Beatty confirms there is no material new information on trading since 3 July 2014 and will publish its interim results on 13 August 2014.

This announcement, that Balfour Beatty has no intention to make an offer for Carillion, is made in accordance with Rule 2.8 of the Code. As a result of this announcement Balfour Beatty will be bound by the restrictions contained in Rule 2.8 of the Code. For the purposes of Rule 2.8 of the Code, Balfour Beatty reserves the right to make or participate in an offer for Carillion (and/or take any other action which would otherwise be restricted under Rule 2.8 of the Code) within the next six months following the date of this announcement in the circumstances set out in Note 2 of Rule 2.8 of the Code.

This announcement is not being made with the consent of Carillion.