Upheaval in Whitehall departments after the Brexit vote and change of government has caused a slowdown in orders for Carillion, the building support services company.

In a trading update, Carillion said it expected the value of orders and probable orders for the second half of 2016 to be lower than the £2.5bn achieved in the first half.

Carillion, which maintains roads, railways and military bases, said government business slowed after the vote to leave the EU on 23 June and the change of government. The result triggered a reorganisation of Whitehall departments and a spending hiatus before the new chancellor’s autumn statement last month.

Carillion is the latest support services company to blame Brexit-related uncertainty for a slowdown in business. Mitie and Capita have issued profit warnings after customers delayed spending because of post-referendum jitters.

Carillion said: “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.”

The company’s shares fell as much as 6% in early trading on Wednesday after the announcement and were down 4% to 245p by late morning.

Carillion said it expected projects to pick up again and that the slowdown was similar to conditions around the 2015 general election when projects were put on hold until departments had more certainty about policy.



The company’s work ranges from the completed expansion of Liverpool FC’s main stand at Anfield to building the 670-bed Midlands Metropolitan hospital, which is scheduled for completion in 2018. UK public sector revenue of £1.75bn last year was 38% of a total £4.59bn.



Carillion said it had also been affected by a slower pace of contract awards from the Middle East, particularly in Oman, as governments in the region cut spending in response to low oil prices.

The Wolverhampton-based company said it expected results for the year to be in line with its forecasts despite the second-half slowdown in orders. But it said the outlook for revenue next year was less clear than at the same time in 2015.

Revenue “visibility” for 2017 is 70% compared with 84% a year ago, and Carillion’s order book will be about £16bn at the end of 2016, down from £17.4bn a year earlier.

The company said its order book did not include £1.5bn of expected revenue from framework contracts, where it has an overall supply agreement with clients and takes on projects as they come up. It also suggested Philip Hammond’s announcement of extra spending on road, rail and digital infrastructure could bring in more business.

The company said: “Given the strength of our order book, framework contracts and pipeline of contract opportunities, we believe we are well positioned to make further progress in 2017.”