Here’s what was said
The share prices of British infrastructure giant Carillion fell 20 per cent today after it announced its “disappointing” first-half results where it has booked losses of over £1bn due to a series of restructuring charges.
The construction firm reported losses today which included an £845mn write down relating to support services contracts and a goodwill impairment charge of £134mn linked to construction activities in the UK and Canada. According to BBC, Carillion’s full-year revenues are now forecast to be between £4.6bn-£4.8bn, down from a previous expectation of £4.8bn-£5bn.
Interim boss Keith Cochrane expressed his disappointment when he said: “This is a disappointing set of results which reflects the issues we flagged in July. We now expect results for the full year to be lower than current market expectations. No one is in any doubt of the challenge that lies ahead.”
The construction group has around 43,000 staff worldwide and 400 at its headquarters in Wolverhampton. It has been thrown into a crisis ever since it was given a hefty profit warning back in July, which sent its shares crashing down by more than 70 per cent in one week. The company’s chief executive had to step down after the management said it was struggling to stay within its borrowing limits.
Carillion is also a major supplier to the Government and some ministers have come out in support of the firm since the announcement. A government spokesman said: “The company has kept us informed of the steps it is taking to restructure the business. We remain supportive of their ongoing discussions with their stakeholders and await future updates on their progress.”
The group had previously blamed poor orders on some delays in UK public spending decisions following the EU referendum, while low oil prices had hit customer spending in the Middle East.
Talking about the way ahead for the company: Cochrane said: “Our objective is to be a lower risk, lower cost, higher quality business generating sustainable cash backed earnings. In the immediate short term, our focus is to complete the disposal programme, accelerate our action to take cost out of the business and get our balance sheet back to a place where it can support Carillion going forward.”
An unnamed Middle East construction firm is rumoured to be lining up a potential offer for Carillion in the wake of its recent dramatic share price falls.