Carillion is being investigated by the UK’s Financial Conduct Authority (FCA) over a series of Stock Exchange announcements it made before last July’s profit warning, when it said it was taking a £845m writedown.
The UK listed contracting and services giant today revealed the probe, which covers the period between 7 December 2016, when it made optimistic statements, and 10 July 2017, the date it announced the writedown.
In a statement, Carillion said: "The Financial Conduct Authority has notified Carillion that it has commenced an investigation in connection with the timeliness and content of announcements made by Carillion between 7 December 2016 and 10 July 2017. Carillion is cooperating fully with the FCA."
As Construction Manager reports, Carillion issued a trading update on 7 December 2016 saying it was on track to post an increase in profit on the back of a surge in revenue.
It also announced it had been appointed preferred bidder on a power transmission project in Canada worth £120m.
Building notes that on 1 March, Carillion confirmed that revenue for the previous year had jumped 13% from £4.6bn to £5.2bn but pre-tax profits had dipped 5% from £155m to £147m due to £55m in writedowns.
At the time, chairman Philip Green said it had a "good platform from which to develop the business in 2017".
The FCA probe comes less than two weeks after Carillion said it expected to finalise a rescue package in by March after being given more time by its banks to fix its finances.
It was set to breach its banking covenants last month but they have now been deferred until the end of April.
Last month Carillion said its new chief executive Andrew Davies will start his new job 10 weeks earlier than expected.
Building also reports that the opening of Carillion’s £335m Royal Liverpool University Hospital job has been delayed again following construction problems. It is one of three UK contracts that has drained the firm’s finances.
Image: The UK listed contracting and services giant revealed an £845m writedown on 10 July 2016 (Carillion)
- Edited on 5th January 2018