Carillion relieved after Dubai raises £7bn bailout bond

John McDonough, chief executive of Carillion, has said the Dubai government’s success in raising $10bn (£7.1bn) through a bond issue last month caused a “collective sigh of relief” in its Middle East business.

The $10bn was the first half of a $20bn bailout designed to save the emirate’s property and construction industry and it was fully subscribed by the central bank in Abu Dhabi.

“I’ve been talking to our people in the Middle East and they’ve seen an upturn in the mood in Dubai. Everyone’s been waiting for this and hopefully there will be more to come.”

Carillion shares have slumped by about a fifth since the last quarter of 2008, partly because of its exposure to the Middle Eastern market.

McDonough was speaking after Carillion announced its results for 2008, which he described as “stunning under the circumstances”.

He said the fall in Dubai would be more than offset by work in Abu Dhabi. “Turnover in Dubai will fall from £250m to £80m in 2009, but will grow from £90m to £350m in Abu Dhabi.”

Turnover at the group in the year to 31 December rose by 32% from £4bn to £5.2bn, largely as a result of the acquisition of Alfred McAlpine last February. Pre-tax profit increased 23% from £94.4m to £115.9m and its order book stood at £20.4bn.