Carillion PLC (LON:CLLN) has warned that it expects its full-year results to be lower than market forecasts, as the troubled construction and support services group reported a massive first-half loss after booking a further provision relating to services contracts.
The small cap firm – demoted from the FTSE 250 index earlier this month - reported a first half pretax loss of £1.155bn, a turnaround from an £84mln profit a year earlier, as revenue edged up to £2..489bn from £2.487bn.
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The massive loss came as the firm booked an additional provision of £200mln for support services contracts in addition the previously announced £845mln charge for construction contracts.
The group also booked a goodwill impairment charge of £134mln in respect of its UK and Canadian construction businesses.
Carillion said it now expects full year results for “to be lower than current market expectations”, with total revenue expected to be between £4.6bn and £4.8bn, against a previous forecast of £4.8bn to £5.0bn
In a statement with today’s results, Keith Cochrane, Carillion’s interim chief executive, said: "This is a disappointing set of results which reflects the issues we flagged in July”.
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He added: "The Strategic Review that we launched in July has enabled us to get a firm handle on the Group's problems and we have implemented a clear plan to address them.”
But concluded: “No one is in any doubt of the challenge that lies ahead.”
Carillion, whose shares have lost two-thirds of their value since it announced the massive contract writedown, departure of its CEO, and a scrapping of dividends in mid-July, said it was in talks to sell its Canadian and UK healthcare businesses and intended to raise £300mln from disposals, up from a previous target of £125mln.
The company said its board is considering other options, including raising equity to repair and strengthen its balance sheet.