Carillion half year profits at £1.15bn loss

Carillion (LON:CLLN) has announced disappointing profits for the first half of the year, with expectations for full-year profits also low.

The UK building and services firm made a £1.15 billion loss for the first half of 2017. The results were due partly due to a £845 million write-off announced in July and an impairment charge of £134 million.

“This is a disappointing set of results,” said interim chief executive Keith Cochrane.

“It reflects the issues we flagged in July and the additional £200m provision for our Support Services business that we have announced today. We now expect results for the full year to be lower than current market expectations.”

“At the heart of this company, there is a strong core. Supported by an operating model that manages risk much more effectively and led by a fresh management team with a mandate to drive cultural change, I am confident that a strong business can emerge,” he continued.

The firm has said they plan to write down the value of its construction businesses by £134 million.

Despite the huge losses, the UK government has remained supportive of the business.

“Carillion is a major supplier to the government with a number of long-term contracts. The company has kept us informed of the steps it is taking to restructure the business. We remain supportive of their ongoing discussions with their stakeholders and await future updates on their progress,” said a Cabinet Office spokesperson.

Since the construction business’s problems came to light over summer, shares in the firm have lost two-thirds of their value. 

According to Michael Hewson of CMC Markets, the firm first saw issues after it had won major contracts on the basis of bids that were too low.

“They low-balled an awful lot of bid work and they’re finding they can’t make any money out of it and it’s caught up with them,”