Carillion's service businesses, which include facilities management company Carillion Services, saw turnover fall back slightly last year to £306.7m (£322.7m). Operating profit dropped almost 28% to £6.2m (£8.6m) before exceptional costs which produced an operating loss of £23.8m. Margins were further depressed at 2% (2.7%).

Contract losses at subsidiary Crown House Engineering and the subsequent restructuring accounted for most of the drop in turnover (see News story). Carillion says sales in other services businesses remained unchanged at £104m, with an average margin of 7%. It expects to see increased turnover this year as the £500m services contract for the Monteray consortium (previously BT Jaguar, 51% owned and led by Carillion Services), comes onstream. Monteray will provide property and facilities management services to around 8,500 BT buildings (see News story).

Both Carillion and BT have denied that the Monteray contract has run into difficulties (see News story) or will be affected by the telecoms company's decision to transfer its property in an effort to raise around £2bn (see News story).

Carillion Services consolidated its position in other key markets during 2000. It continues to be a leading supplier of integrated FM services to the health sector, including eight NHS Trusts; delivers property and estate management services to the Metropolitan Police; manages the Royal Parks in Greater London, which it successfully re-tendered during the year; supervise 14 Estate Works Consultancy contracts for the Ministry of Defence; and provides non-residential property management services for Westminster City Council.

As a group, now headed by ex-Johnson Controls man John McDonough (see News story), Carillion reported turnover up 6% to £1.9bn, producing profit before tax and exceptional items up 14% to £41.9m. After exceptional items, pretax profit was just £13m. Chairman Sir Neville Simms said: "Despite this setback (the Crown House losses), the Group's strategic progress is evident in its underlying performance and the quality of its £4bn order book, an increasing proportion of which comes from the growth areas of Private Finance, Infrastructure Management and Services."

Carillion closed PFI projects worth £470m during the year, taking its portfolio of financially closed PFI contracts to 14.

Richard Byatt