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Strong growth from public sector contracts has been predicted by another major City firm. Construction and infrastructure expert, Carillion Plc, has become the latest to deliver strong results and an upbeat future forecast, due significantly to local government contracts. Reporting its latest results to the Square Mile this week, the firm revealed an order book of £19.7bn, down only marginally on December last year, and a pipeline of potential new business worth around £2.9bn. Selling its outsourcing and IT functions had helped cut its debt by one-third during the first half of this year. Like its competitors, Carillion reported the construction sector in the UK was flat, but demand for support services was holding up. Internationally, the predicted slowdown in construction in the Middle East had not materialised. ‘We are not worried about the order book,' said chief executive, John McDonough. The firm revealed key contracts gained in the Building Schools for the Future programme had also helped boost the results. The news came just a week after the bosses of Capita and VT Group, also gave upbeat assessments of future profits, despite concern over potential cuts in public spending. The company statement gave an upbeat assessment. It said: ‘We have maintained our strong order book of long-term contracts for government and high-quality private sector customers. ‘Notable first-half successes included new contracts for the NHS worth more than £260m, road and rail infrastructure maintenance contracts worth £250m, and contracts for private sector customers worth around £175m. ‘We have a well-balanced and resilient business with a strong order book and good positions in our chosen market sectors. This, together with the cost savings being delivered from integrating the Alfred McAlpine business, means we expect to build on our strong first-half performance and achieve our objective of delivering materially enhanced earnings in 2009.'

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BUSINESS

City firm buoyant as sector leads growth

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