Carillion has issued a further profit warning while announcing a £1.2bn loss for the first half of its financial year.
The construction firm, which is fighting for its financial future amid a massive debt pile and badly-performing contracts, said a series of further costs would deliver extra damage to its full-year performance.
Top of the pile was a £200m provision for support services contracts – on top of a previously announced £845m writedown on its construction work.
It said its contract review had now been finalised and it was working hard to manage risk – both on site and behind the scenes.
Shares – down 75% over the past year – lost almost a fifth of their value when trading began on Friday before some poise was restored. Analysts said it reflected the company’s weaker guidance.
Sky News revealed on Thursday that pension trustees at Carillion had called in PricewaterhouseCoopers (PwC) to advise them on how to protect members’ interests amid the firm’s massive restructuring effort.
The crisis was sparked in July after a profit warning that saw the immediate departure of its chief executive Richard Howson.
The company, which is working on the HS2 rail link among other major projects, plans to sell a number of divisions in the Middle East, Canada and the UK healthcare sector to raise several hundred million pounds to help shore up its balance sheet.
Video: July: ‘Secure undertakings’ from Carillion
It said it now expected net debt to grow to up to £850m by the end of 2017 – from a first-half average of £694m – with its revenue range falling from £4.8bn-£5bn to between £4.6bn-£4.8bn.
Keith Cochrane, Carillion’s interim chief executive, said: “This is a disappointing set of results which reflects the issues we flagged in July and the additional £200m provision for our Support Services business that we have announced today.”
He added: “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.
“No one is in any doubt of the challenge that lies ahead.”
Source: Sky