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| Version 2 | Version 3 |
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| Carillion shares dive on sales warning | Carillion shares dive on sales warning |
| (about 1 hour later) | |
| Shares in infrastructure and construction firm Carillion were down 35% around lunchtime following a sales warning. | |
| The company warned its annual results would be "below management's previous expectations". | The company warned its annual results would be "below management's previous expectations". |
| The company said it would undertake a "comprehensive review" of the business. | The company said it would undertake a "comprehensive review" of the business. |
| It also said its chief executive Richard Howson, would step down and be replaced by Keith Cochrane while the company looks for a permanent boss. | It also said its chief executive Richard Howson, would step down and be replaced by Keith Cochrane while the company looks for a permanent boss. |
| Carillion's projects have included the first phase of the Battersea Power Station development and the extension of Liverpool's Anfield football ground. | Carillion's projects have included the first phase of the Battersea Power Station development and the extension of Liverpool's Anfield football ground. |
| The company, also has a number of public private partnerships (PPP). | The company, also has a number of public private partnerships (PPP). |
| Consultants KPMG have been reviewing its businesses. | Consultants KPMG have been reviewing its businesses. |
| As a result of that review, it has set aside £845m in provisions, of which £375m relates to the UK and £470m to overseas markets, the majority of which relates to exiting markets in the Middle East and Canada. | As a result of that review, it has set aside £845m in provisions, of which £375m relates to the UK and £470m to overseas markets, the majority of which relates to exiting markets in the Middle East and Canada. |
| Carillion will also suspend its dividend payout to shareholders. | Carillion will also suspend its dividend payout to shareholders. |
| Philip Green, Carillion's non-executive chairman, said that the action is needed to reduce the firm's borrowing: "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." | Philip Green, Carillion's non-executive chairman, said that the action is needed to reduce the firm's borrowing: "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." |
| Debt worries | Debt worries |
| Nicholas Hyett, equity analyst, at stockbrokers Hargreaves Lansdown, said: "Carillion looks like it's trying to bail out a supertanker with a soup spoon. Despite the group's best efforts debt is continuing to climb, and at an increasing rate, while the construction business seems to be hitting one hurdle after another. | Nicholas Hyett, equity analyst, at stockbrokers Hargreaves Lansdown, said: "Carillion looks like it's trying to bail out a supertanker with a soup spoon. Despite the group's best efforts debt is continuing to climb, and at an increasing rate, while the construction business seems to be hitting one hurdle after another. |
| He said that investors are likely to be worried that Carillion will be looking to raise "significant" funds through a share sale. | He said that investors are likely to be worried that Carillion will be looking to raise "significant" funds through a share sale. |
| A share sale is generally seen as negative for existing shareholders as it dilutes their ownership of the company. | A share sale is generally seen as negative for existing shareholders as it dilutes their ownership of the company. |
| Joe Brent, analyst at Liberum, was also blunt about the business: "The £845m provision is huge however we look at it. No clearer what exactly has gone wrong... No quick fixes for the balance sheet. Hard to see a solution without equity [share sale]." | Joe Brent, analyst at Liberum, was also blunt about the business: "The £845m provision is huge however we look at it. No clearer what exactly has gone wrong... No quick fixes for the balance sheet. Hard to see a solution without equity [share sale]." |
| Analysis: Rob Young, business reporter | Analysis: Rob Young, business reporter |
| The chairman says the firm needs to take "urgent action" and so will carry out a root and branch review of the business. That means it will likely end up selling off or shutting down parts of the company. | The chairman says the firm needs to take "urgent action" and so will carry out a root and branch review of the business. That means it will likely end up selling off or shutting down parts of the company. |
| It has already said it's getting out of the construction game in Qatar, Saudi Arabia and Egypt. We've no idea what it might mean for jobs - it employs 48,000 people worldwide. Hedge funds have long suspected there was something up with Carillion's finances. Speculators have been betting against the firm's share price for a while. It turns out they were right. | It has already said it's getting out of the construction game in Qatar, Saudi Arabia and Egypt. We've no idea what it might mean for jobs - it employs 48,000 people worldwide. Hedge funds have long suspected there was something up with Carillion's finances. Speculators have been betting against the firm's share price for a while. It turns out they were right. |