Carillion aims to double Middle East revenues as it targets more UAE orders

British building contracting and services firm, which employs 40,000 people across the world, predicted that second-half revenues would be higher than those for the first half.

In recent years Carillion has been attempting to increase contracting work for its overseas operations in the Middle East. Fatima Al Marzooqi/ The National

The British contractor Carillion expects to double its annual revenues from its Middle East business to about £1 billion (Dh5.72bn) by 2015 as the company targets more UAE orders.

In its financial results posted on the London Stock Exchange yesterday, the building contracting and services firm, which employs 40,000 people across the world, predicted that second-half revenues would be higher than those for the first half.

The company revised its full-year turnover figures to about £500 million - a number it hopes to double in just two years.

Carillion said it was predicting "healthy double-digit percentage growth" on full-year revenues for the business after reporting a 10.2 per cent increase in sales for the first half of the year to £221.8m.

At the same time, profits in the Middle East slumped 27 per cent to £9.9m as margins fell to 4.5 per cent this year from 6.7 per cent last year.

The group blamed more competitive market conditions, the early stage of projects and costs associated with growing its footprint in the region.

The regional figures did not live up to some analysts' expectations.

"On the Middle East side investors will be slightly disappointed with Carillion from a profitability point of view," said Andrew Gibb, an analyst at Investec.

"The drop in margins to 4 per cent is greater than we were predicting and although turnover is accelerating, the company will have to put in a very good second half performance to meet its targets."

"Carillion has been hit by an increase in competition, especially from the Far East," he added.

In recent years Carillion has been attempting to increase contracting work for its overseas operations in the Middle East and Canada as well as its own service sector, to compensate for a shrivelling market at home. However, so far the company has been hampered in its plans by the slow UAE construction market.

Carillion said that orders and probable orders at its Middle Eastern operations increased 37.5 per cent over the first six months of the year to £1.1 billion.

The company's chairman, Philip Rogerson, said that Carillion won orders and probable orders in the first half worth about £600m.

These included a £120m contract won by the company's UAE joint venture, Al Futtaim Carillion, to build the Four Seasons hotel in Abu Dhabi and a £130m contract won by Carillion Alawi, its Omani arm, for work on the new Oman Convention and Exhibition Centre.