The construction company Carillion has won £470m of contracts at its Middle East joint venture thanks to the oil-fuelled building boom in the region.
The group is involved in a number of huge building projects, including Dubai Festival City – a new town which will be home to 25,000 people – and a mix of hotels, leisure and retail developments in Cairo.
Carillion has also signed agreements for up to a further £5.3bn of construction work through its Middle East joint venture business, Al Futtaim-Carillion. John McDonough, the chief executive, said he hoped to double the amount of work the company won in the region over the next five years.
Carillion, which also operates in Britain, Canada and the Caribbean, has an order book filled with projects worth £16bn. Yesterday, it posted a 12 per cent increase in revenues, to £1.9bn for the six months to 30 June. Its underlying pre-tax profit jumped by 28 per cent to £34.3m. The company's proposed interim dividend increased by 13 per cent to 3.5p.
Mr McDonough said: "The progress we are making in the Middle East represents a further major step towards delivering our objective of more than doubling revenue from this region over the next five years, through extending our existing operations in Dubai and Oman into new territories."
The value of construction projects announced by the member states of the Gulf Co-operation Council rose by 59 per cent to $143bn last year, according to law firm Trowers & Hamlins. The region's "real estate mega-projects" are driven partly by a desire to diversify the region's economies away from oil by creating financial services and tourism hubs, Trowers said. It believes there is a need to provide extra housing to deal with the region's unique demographics. In Saudi Arabia, 70 per cent of the population is aged under 30, and demand for new residential property is driving many of the kingdom's big projects.
Carillion also announced a refinancing of its corporate borrowing facilities, which have increased by £261m to £590m. This will be used to support the group's medium-term growth strategy. Its finance director, Richard Adams, said yesterday: "We are pleased to have negotiated new facilities, particularly in the current challenging conditions of the global debt markets."
Carillion, based in Wolverhampton, employs 50,000 staff worldwide and its projects range from defence, education and health to roads, rail and civil engineering.Reuse content