BENGALURU: British construction and support services group Carillion said on Friday it expects full-year results to be lower than market forecasts, as it booked a further provision relating to services contracts.
鈥淭his is a disappointing set of results which reflects the issues we flagged in July and the additional 200 million pound 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,鈥� Keith Cochrane, Interim Chief Executive, said in a statement
Carillion, whose shares have lost two-thirds of their value since it announced a writedown in mid-July, said it was in talks to sell its Canadian and UK health care businesses and intended to raise 拢300 million (SR1.5 billion) from disposals, up from a previous target of 拢125 million.
The company said its board is considering other options, including raising equity to repair and strengthen its balance sheet.BENGALURU: Carillion is exploring options including a share issue to shore up the balance sheet, the British construction and support services group said on Friday, as it warned that full-year results would be lower than market expectations.
The company, whose shares have lost two-thirds of their value since it announced a writedown on July 10, booked a further 200 million pound provision relating to services contracts, following a review of its entire business.
鈥淲hile self-help measures will lead to a material reduction in our average net debt, these along will not be enough to achieve our target,鈥� the group said in a statement.
鈥淭he board is therefore considering other available options, including raising equity to repair and strengthen the balance sheet in due course,鈥� it added.
Carillion booked an 拢845 million (SR4.25 billion)writedown on problematic construction contracts in July, prompting the departure of is chief executive.
Analysts have said they expect Carillion to have to raise new funds to shore up its balance sheet, although uncertainty over its contracts, its debt position and its pensions obligations have raised questions over the value of the company.
鈥淲e believe that the business could have an enterprise value of 1.6 billion pounds,鈥� Liberum analysts wrote in a client note.
Shares in Carillion rose this week after a newspaper reported that a Middle Eastern buyer was considering a bid.
Carillion said on Friday that its 2017 revenue was expected to be between 拢4.6 billion and 拢4.8 billion, down from a previous expectation of 拢4.8 billion to 拢5 billion.
Full-year average net debt was expected to be between 拢825 million and 拢850 million, it said, as it announced measures to boost its balance sheet including raising 拢300 million from asset disposals and an 拢80 million reduction in its pension deficit.
Carillion said on September 11. that its chief financial officer Zafar Khan was leaving and would be replaced by Emma Mercer, the finance head of its UK construction business.