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Carillion woes continue with latest profit warning

02 October 2017

After revealing a loss of £1.1bn for the first half of this year, Carillion has also stated that year end results are likely to be worse than predicted.

However, according to www.constructionglobal.com, the company's "stand in management" team said it has a "firm handle" on the issues affecting the construction group and has implemented a strategy to deal with them.

Following the announcement, share prices for Carillion fell by nearly 13%.

Pre-tax losses fell to £1.15bn after it posted a profit of £84m for the previous 12-month period.

Revenues remained stable, however, with the business recording a total of £2.5bn compared to £2.49bn for the previous year.

The company also stated it is considering a share issue, among other options, to improve its financial situation.

It has conducted a number of cost-cutting exercises this year, including staff redundancies, but announced a write-down in early July.

A review of the entire business resulted in a further £200m provision relating to its service contracts.

Interim chief executive Keith Cochrane described the announcement as "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," said Mr Cochrane, who replaced Richard Howson after he resigned in July.

The company has outlined plans to exit a number of operations in the Middle East and Canada, as well as its UK healthcare activities.

Its issues have been attributed to weak cash flow and failure to replace completed contracts, resulting in debt rising from £42m to an average of £649m in the first half of this year over the previous seven years.


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