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Carillion sees slowdown in pace of new orders post-Brexit
December 7, 2016 / 7:44 AM / a year ago

Carillion sees slowdown in pace of new orders post-Brexit

(Reuters) - Carillion Plc, a British building support services company, said the pace of new order intake had slowed in the second half of the year, partly due to a spending delay by the government following Britain’s vote to leave the European Union.

The company, which maintains railways, roads and military bases, said it expected the value of orders and probable orders won in the six months ending Dec. 31 to be lower than the 2.5 billion pounds’ worth in the first six months of the year.

Although most UK construction and support services managed to avoid an immediate post-Brexit hit as many had forecast, recent warnings from Capita and Mitie have highlighted that Brexit uncertainty has caused customers to delay decisions.

Carillion said on Wednesday it believed the slowdown was caused by the government appointed after the June 23 referendum taking time to reassess its spending priorities ahead of its November budget.

It also said there had been a slower pace of contract awards from in the Middle East, particularly in Oman, as the region grapples with low oil prices.

Carillion’s 2016 new and probable orders pipeline was expected to reach 4.5 billion pounds, it said, taking its total and probable orders pipeline to about 16 billion pounds by the year end.

That is lower than the company’s forecast of about 17.4 billion pounds, though it does not include some 1.5 billion pounds of framework contracts.

Carillion said the current pipeline gave it order visibility of about 70 percent for revenues for the next full year, lower than the 84 percent visibility it had reported last year for 2016 revenues.

Reporting by Esha Vaish in Bengaluru. Editing by Jane Merriman

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