SUPPORT services company Carillion saw its bottom line earnings dragged down by its £300m purchase of Newcastle-based environmental services business Eaga.
But the company said it had seen a surge in demand from councils looking to save money which should benefit its North East-based business which is now known as Carillion Energy Services.
Carillion said that it expected to save £15m a year by the end of 2013 from cost savings at Carillion Energy Services, which includes the loss of 700 jobs from its 1,400-strong workforce providing the Warm Front home insulation scheme, which is being cut back.
The business is focusing on stepping up its work on the Green Deal scheme, which brings environmental improvements to homes and businesses, currently worth around £15bn a year and forecast to grow to £22bn by 2015.
CES has already amassed contracts worth £600m since the takeover of Eaga was completed in April.
Carillion, which maintains motorways, railways, military bases and telephone lines, said its overall underlying profit for the first half of the year increased by around 10% to £72.5m, which is ahead of broker forecasts.
But its pre-tax profit plunged by 35% to £32.7m following the £298m takeover of Eaga. There had also been a one-off £20m cost of integrating the two companies which had hit its earnings.
Carillion’s revenues were down by 2% to £2.45bn. The company said the extra revenue from its new energy services business was offset by a 15% drop in income from its construction business as that sector continues to struggle. And the company, which has operations in Canada and the Middle East, had an order book of £72.5m, ahead of its broker’s forecasts.
