Carillion warns Brexit vote and low oil prices will hit second-half trading
Support services firm Carillion has said that Brexit and prolonged low oil prices are expected to dent its performance in the second half of the year.
The group cautioned that the pace of orders has slowed as Whitehall reins in spending, with the number of new contracts set to be lower than the £2.5 billion gleaned during the first six months of the year.
"The pace of new order intake has slowed in the second half. We believe this is due in part to the changes within UK Government departments following the EU referendum result, as they reassessed their spending priorities ahead of the Autumn Statement," Carillion said.
It also flagged a slower pace of contract awards in the Middle East, particularly in Oman, as a result of the "prolonged low oil price".
The company's total order book at the end of the year is expected to be £16 billion compared to £17.4 billion last year.
Nevertheless, the company still forecasts it will meet expectations due to a strong performance in support services, with that proportion of the group's operating profit tipped to increase to around two thirds.
In October, the group bagged a £350 million contract with Nationwide Building Society.
Running over seven years, Carillion will provide services to Nationwide's headquarters in Swindon, its 15 corporate offices, its critical data centres and 700 retail branches throughout the UK.