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Trading statements

Carillion strategic review as H1 operating profits fall short

10 July 2017 07:19

Carillion has warned that it expected first half operating profit to be lower than forecasts primarily due to phasing of public private partnership equity disposals, which were now expected to be in H2.

The group said H1 revenue was expected to be similar to that in 2016 at approximately £2.5bn.

Carillion also announced that Keith Cochrane had been appointed as interim group chief executive, while a search was undertaken for a permanent appointee.

It said Richard Howson had stepped down as group CEO and from the board but would stay with the group for a period of up to one year to support the transition. Cochrane was appointed to the Carillion board in July 2015 and has served as the senior independent non-executive director since 1 September 2015. The board also announced today that it was undertaking a comprehensive review of the business and the capital structure, with all options to optimise value for the benefit of shareholders under consideration.

An update on the Board's review of the business and capital structure will be provided at the Group's interim results, in September. It said significant actions already taken to reposition the business.

Non-executive chairman Philip Green said: "Despite making progress against the strategic priorities we set out in our 2016 results announcement in March, average net borrowing has increased above the level we expected, which means that we will no longer be able to meet our target of reducing leverage for the full year.

"We have therefore concluded that we must take immediate action to accelerate the reduction in average net borrowing and are announcing a comprehensive programme of measures to address that, aimed at generating significant cashflow in the short-term.

"In addition, we are also announcing that we are undertaking a thorough review of the business and the capital structure, and the options available to optimise value for the benefit of shareholders.

"We will update the market on the progress of the review at our interim results in September."

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