13m ago10:54
Carillion shares plunge after third profit warning
Carillion shares plunged as much as 60% in early trading after the construction group involved in HS2 and Battersea Power Station issued its third profit warning of the year:
The group now expects that a combination of delays to certain PPP disposals, a slippage in the commencement date of a significant project in the Middle East and lower than expected margin improvements across a small number of UK Support Services contracts, partially offset by cost savings initiatives realised in the fourth quarter, will lead to profits for the year to 31 December 2017 being materially lower than current market expectations.
Shares are now down 37% at 26p.
The company, which is struggling to cope with a large debt pile and badly-performing contracts, said the board expects a covenant breach at the end of December and will need to implement a recapitalisation plan.
Keith Cochrane, interim chief executive, said:
Whilst we continue to target cash collections, reduce costs, execute disposals and focus on delivering for our customers, it is clear that significant challenges remain and more needs to be done to reduce net debt and rebuild the balance sheet.
Constructive dialogue is continuing with our financial stakeholders, and I am grateful for their support. I remain focused on addressing this issue before my successor, Andrew Davies, takes up the role on 2 April 2018.
46m ago10:21
1h ago10:00
