On Wednesday, Britain’s Carillion, a support services company said it’s expecting a slowdown in government contracts that were presented ahead of the national election next year. It also reported reduced revenue estimates.
Carillion, a company that maintains British roads, railways, and military bases also indicated its expectations that government departments would likewise reduce their spending ahead of the same elections, resulting in a slowdown when it comes to work for outsourcers.
Richard Howson, company CEO said the UK government is one of the company’s biggest customers, thus, the upcoming election year would typically mean spending lesser money than intervening periods.
The company has gained for the past years since tight government budgets have urged more outsourcing of labor to reduce costs. Carillion has also prevented scandals, which have affected its rivals like G4S and Serco.
Carillion expects its revenue for 2014 to be just as the same with last year, which is predicted as income growth. The company has secured 4.6 billion pounds for new contracts for the year’s first-half, although market conditions stay challenging. Its mid-term outlook also remains positive.
The CEO said company outlook remains unchanged, along with their ambition to keep the margin at the level where it was before in the past two years, which is considered a strong margin for the industry. Company shares remained flat at 347 pence.