Carillion calls in accountant EY to cut costs

Grant Prior 6 months ago
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Carillion has appointed accountant EY to support its strategic review “with a particular focus upon cost reduction and cash collection.”

The Carillion Board confirmed a comprehensive review of the business and company structure last week after a shock profit warning highlighted a £845m provision to cover contract problems.

The shortfalls were discovered following an earlier contract review helped by fellow accountants KPMG.

Carillion has also called in HSBC as adviser and corporate broker as the share price went into free fall wiping around £600m off the firm’s value last week.

Carillion said: “The Board has identified a number of actions to reduce average net borrowing including further cost efficiencies, an increased focus on managing working capital and on recoveries and cash collection.”

Keith Cochrane, Interim Chief Executive, said: “We are moving forward quickly with the actions outlined last week.

“Alongside our own efforts, EY will provide support across the business and bring an external perspective to our cost reduction and cash collection challenge.

“My priorities are to reduce the Group’s net debt and create a balance sheet that will support Carillion going forward.

“We need to simplify the business and demonstrate that value can again be created for shareholders by focusing the Group on its core markets, including infrastructure and property services, in which it has good strengths and leading positions”

The move – and a major HS2 contract win this morning – saw Carillion’s share price recover 12% in early trading.

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