Wolverhampton-based engineering and construction giant Carillion has moved to reassure shareholders over costs associated with its takeover of rival Alfred McAlpine.
Reports over the weekend suggested that the group would have to write off as much as £400 million – £100 million of which related to the amount of money it expected to receive from some of Alfred McAlpine's contracts.
However, in a Stock Exchange announcement Carillion said it wanted to "clarify" that the fair value exercise it is currently carrying out over the McAlpine deal would have no impact on either its total net assets, profits or cash flow.
"Only post acquisition restructuring costs, previously announced at £30 million, are required to be deducted from Carillion's profits and net assets. Such amounts will be treated as 'exceptional' charges and will have no impact on underlying results," the group said.
Carillion said it had made substantial progress towards delivering the £30 million of annualised cost savings it expects to achieve from the acquisition, with over 60 per cent of these savings already firmly identified.
"Carillion also confirms that it continues to expect to make strong progress in 2008 and deliver materially enhanced earnings in 2009," it said. "Carillion remains on track to meet its previously announced objective of achieving net borrowing of £300 million by the year end."
Carillion is due to stage a presentation for investors on its support services business and on its pre-close update on trading on June 30.