Carillion IT outsourcing boosts profits

Gaining contracts from outsourcing, whilst outsourcing its own processes

Carillion operating profits were healthy as result of the sale and outsourcing of its IT services business.

In a trading update, the building services and engineering group announced it has delivered strong growth in the first half of 2009.

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In its statement to markets, Carillion said it had raised £89.9 million from the sale and outsourcing of IT, as well as the sale of two Public Private Partnership projects. This has resulted in Carillion lowering its borrowing for the first half of the year to £150 million.

The integration of construction rivals Alfred McAlpine is beginning to show. Carillion acquired Alfred McAlpine in 2008 and is seeing savings of £15m from the deal and expects savings to increase to £35m this year and £50m next year.

Carillion is also bucking the widely reported trend of construction related companies struggling in the current credit crisis. The trading statement reported orders worth £19.7 billion for the period ending June 30, 2009, only marginally down from the previous half ending December 2008 when it reported and order book worth £20.4bn. Carillion said it has £2.9bn in new orders pending.

The economic climate and the desire by C-level management to seek cost efficiencies through outsourcing is benefiting Carillion, which has seen both public and private sector organisations look to outsource facilities management to the company.