Carillion’s shares jumped by 17 per cent in early dealings on Wednesday after a remarkably up-beat trading statement by the Wolverhampton property services company.

They later settled back to finish at 239p, still 19.5p or eight per cent ahead on the day. They have now recovered by 38 per cent from this year’s low of 172.75p.

“We are upgrading people’s expectations for 2008,” said Richard Adam, Carillion’s finance director, presenting the statement.

Healthy trading, integration savings from last year’s £570 million acquisition of Alfred McAlpine and a lower tax rate should deliver underlying earnings 15 per cent ahead of last year’s, instead of ten per cent indicated previously.

“For 2009, we continue to believe we will have double-digit growth,” Mr Adam added. “We have a very strong balance sheet. Previously we put our year-end net debt at £300 million. We now expect £275 million.”

Howard Seymour, an analyst at the stockbroker Numis, commented: “Carillion must be one of the few companies which can point to double-digit earnings growth next year.”

The company said cost savings at McAlpine are now expected to reach £50 million a year by the end of 2010, £10 million more than previously expected. Some £15 million of that has been delivered during 2008.

The one-off cost of achieving these savings, though, will rise to £55 million from £40 million indicated in the past.

The statement made no mention of future dividends, but Mr Adam said “We have a progressive dividend policy and we expect to make increases at least for 2008.”

Asked about job prospects, he said “We will be a net employers this year and we expect to be again in 2009.”

Carillion expects is tax rate to fall to 20 per cent from 25 per cent as a result of chancellor Alistair Darling’s pre-Budget report which proposed to levy no UK tax on the foreign earnings of British companies.

Carillion makes considerable profits in the Middle East – which pay no tax locally either.

John McDonough, Carillion’s chief executive, said the company is well place to benefit from the Government’s commitment to boost public spending to mitigate the effects of the recession.

Some 80 per cent of its UK contracts are in the public sector, he pointed out.

“There is £3 billion pulled forward into 2009 and that is in areas where we are in like roads, transport, schools and health. They are spending in areas where we are relatively strong,” he added.

Some two-thirds of Carillion’s profits come from Public Private Partnerships. It has sold six investments in mature PPP projects for £59.7 million this year. That brought the total to 23 over the past five years, generating £179 million cash and pre-tax profits of £104 million.

In the Middle East, Carillion has set itself a target to generate revenues of over £600 million, nearly double its sales in the region in 2007 with operating margins of some six per cent.

“Going forward, we expect growth to be increasingly driven by Abu Dhabi, where we negotiated substantial news work in 2008 worth over £1 billion and also increased our pipeline of potential opportunities,” it stated.

“We therefore continue to expect long-term sustainable growth in this region.”