Carillion Plc Wins £122m Network Rail Contract

Carillion (LSE: CLLN) announced two new lucrative contracts alongside its half-year trading update this morning.

The Crossrail West Inner Track Improvements and Crossrail Old Oak Common and Paddington Approaches and Intercity Express Programme were awarded by Network Rail and worth £122m.

Chief executive Richard Howson commented:

”As one of Network Rail’s largest suppliers, we are delighted to have been selected for these important contracts.  We look forward to continuing our strong relationship with Network Rail through working together to delivering the upgrades required to enable Crossrail to connect to the existing network between Stockley Junction and Old Oak Common.” 

Elsewhere in today’s update, Carillion revealed that performance in the first-half was in line with expectations, and full-year targets remain unchanged. Revenue dropped, but this was baked into the share price as it was affected by planned re-scaling of UK construction.

Underlying operating profit for the first six months of 2013 is anticipated to increase, while new order intake remained strong and management stated that their pipeline of contract opportunities has also increased.

One of the FTSE’s highest yielders, with a consensus forecast of over 6%, Carillion is however bound to the fortunes of the UK’s premier stock market. As the Footsie rises, so does Carillion — though the inverse is true also.

But if you’re looking for a similarly high yield in a company that could prosper if the economy turns for the worse, as well as deliver a healthy gain if sentiment suddenly improved, then you need to read our brand-new special report!  

The Motley Fool’s Top Income Stock For 2013” features a company on a safe 5% yield, is completely free, and will be sent to your inbox immediately! Just click here now to find out more…

> Sam does not own shares in any of the companies mentioned.