Shares in construction firm Carillion jumped 2.8 per cent today after it revealed rising sales in Abu Dhabi and a good performance in Oman will more than offset a reduction in work from debt-laden Dubai.
The Wolverhampton-based support services company said its overall order book remained healthy thanks to its strong mix of business in the UK, the Middle East and Canada.
It reported a reduction in activity levels in Dubai, but pointed out that the emirate now accounted for less than 20% of its Middle East revenues.
Overall, the company’s Middle East construction services arm is expected to deliver “substantial” revenues and profit growth.
In the second half of the financial year the company’s joint venture business, Al Futtaim Carillion, completed the landmark £380 million Yas Hotel, which formed the centre piece of the new Formula 1 Grand Prix circuit development in Abu Dhabi.
In the second half of the year, Carillion secured a £275 million contract to build the Majlis, a new parliament building in Oman and a £150 million contract to build new headquarters for the Abu Dhabi Investment Council.
Carillion is currently bidding for projects worth £4 billion in Abu Dhabi.
Public private partnerships (PPP) in the UK continue to generate “substantial value” for the company, it added.
The company is the preferred bidder for the £1.6 billion Southmead Hospital project in Bristol.
Carillion has also been named as preferred bidder for contracts to build a Centre for Mental Health and Addiction in Toronto and for the Rochdale Building Schools for the Future programme.
In total, the company is shortlisted for six PPP projects.
The company’s total order book at the end of 2009 is expected to be around £17 billion, the company said in a trading update for the year to December 31.
Support services continues to make the largest contribution to the group’s underlying operating profits.
The company said that earnings were being boosted by an outsourcing drive by public and private sector organisations.
The most notable contract win in the second half of the year was a £1 billion, seven-year deal to provide nationwide support services for telecoms firm BT’s Openreach arm - including the maintenance of copper wires between homes and local exchanges, as well as the laying of new fibre optic cables.
The company expects market conditions to remain challenging in 2010. It added that the group continues to be well positioned and believes it will make “further progress in 2010”.