Shares in troubled infrastructure giant Carillion tumbled on Friday after the firm revealed mammoth half-year losses of more than £1 billion and again warned over its performance.
The firm said pre-tax losses for the six months to June 30 came in at a staggering £1.15 billion as it was dragged down by a series of restructuring charges.
The figure compares with an £84 million profit in the same period last year and includes an £845 million write-down relating to support services contracts and a goodwill impairment charge of £134 million linked to construction activities in the UK and Canada.
It has also made a fresh £200 million provision for support services contracts.
As a result, Carillion said that full-year results will be lower than current market expectations, with total revenue expected to come in between £4.6 billion and £4.8 billion, down from £4.8 billion to £5 billion.
On an underlying basis, pre-tax profit plunged 40% to £50 million.
Carillion, which has around 43,000 staff worldwide, has been thrown into crisis since a hefty profit warning in July, which sent its shares tumbling by more than 70% in one week.
Following the stock market announcement, the group’s shares were down 17% to 53p in afternoon trading.
Interim boss Keith Cochrane described the results as “disappointing”.
He said: “This is a disappointing set of results which reflects the issues we flagged in July. We now expect results for the full year to be lower than current market expectations.
“No-one is in any doubt of the challenge that lies ahead.”
Carillion is a major supplier to the Government with a number of long-term contracts and was named among the firms awarded deals for the building of phase one of the HS2 rail line.
A Government spokesman said: “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.”
July’s profit shock saw chief executive Richard Howson step down as the group said it would need to bolster its balance sheet and was struggling to stay within its borrowing limits.
Full-year net debt is forecast to come in at between £825 million and £850 million.
Since July, it has also parted company with its finance chief and announced a raft of senior management changes.
The group has previously blamed poor orders on some delays in UK public spending decisions following the EU referendum, while low oil prices had hit customer spending in the Middle East.
But the firm’s battered share price was given a reprieve earlier this week when reports surfaced that a Middle East investor is planning a takeover bid for the group.
Friday’s interim results included an update on its group-wide review as it battles for survival.
Mr Cochrane added: “The strategic review that we launched in July has enabled us to get a firm handle on the group’s problems and we have implemented a clear plan to address them.
“Our objective is to be a lower risk, lower cost, higher quality business generating sustainable cash-backed earnings. In the immediate short term, our focus is to complete the disposal programme, accelerate our action to take cost out of the business and get our balance sheet back to a place where it can support Carillion going forward.”
To this end, Carillion said that discussions are ongoing regarding sales of its business in Canada and the UK healthcare arm.