Business

Carillion faces probe by finance watchdog

Infrastructure giant says it will co-operate with investigation looking at timeliness and content of financial announcements

An investigation has been launched into financial announcements made by infrastructure giant Carillion.

The Wolverhampton-based company told the Stock Exchange today the Financial Conduct Authority (FCA) had commenced an investigation "in connection with the timeliness and content of announcements" made between December 7, 2016 and July 10, 2017.

Carillion said it was co-operating fully with the FCA.

The period in question was a troubled one for the company as its chief executive issued a profit warning and then stepped down from the role.

Carillion led the development of the Library of Birmingham, is working on the first phase of the £700 million Paradise regeneration in the city centre and last July was awarded tunnelling contracts on high-speed rail line HS2.

In December, the firm, which is scrambling to reduce its debt pile, struck an agreement with its lenders to defer a crucial financial covenant test, a development that will give the troubled group more breathing space.

In November, the group issued its latest profit warning and said it would breach its debt covenants, which resulted in another share price collapse.

The firm said at the time that annual profits were set to be "materially lower than current market expectations" as it grappled with a string of delays and smaller-than-expected improvements to margins on certain contracts.

New chief executive Andrew Davies will start in the role on January 22, having originally been in due to join the firm in April.

View full mobile page