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Chief executive quits following Carillion profit warning

12 July 2017

Following its profit warning announcement, Carillion has announced a number of measures to address the issues identified as the cause.

Reported in the Financial Times and other national media publications earlier this week, the announcement saw the company's share price drop by nearly 40%.

It has attributed the missing of revenue targets to difficulties within markets and the measures implemented to cut borrowing.

Operating profits for the first half of the year would also be lower than expected, the company said, although no further explanation was provided.

Chief executive Richard Howson has stepped down from his role, although he will remain with the business for up to 12 months to assist with its transition.

Non-executive director Keith Cochrane has replaced Mr Howson on a temporary basis until the appointment of a permanent chief executive.

In addition to ramping up debt-reduction measures, Mr Cochrane will oversee "a thorough review of the business and the capital structure", according to the group's statement.

Late payment from construction work combined with a lack of new contracts saw borrowing increase to £695 in the first half of this year, compared with £586.5m in 2016.

Dividend payments had been cancelled as a result and the company outlined further measures, including leaving some markets and being more selective in taking on new contracts, in order to reduce further risks.

Carillion is now expected to record revenues of between £4.8bn and £5bn, reduced from a previous estimate of just over the £5bn mark.

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