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Carillion investors doubt growth potential

Some investors have lost faith in Carillion, despite a growing pipeline of potential work
October 13, 2015

Carillion (CLLN) has become the most shorted stock on the London Stock Exchange, with 14 institutional investors taking a short position of 0.5 per cent or more of the infrastructure group's total outstanding shares. At least 18.5 per cent of its shares on loan, with investors including Blackrock Investment Management taking a short position.

IC TIP: Buy at 309p

During the first half of the year Carillion's pipeline of contract opportunities grew to £40.5bn, from £39.2bn at the end of last year. Earlier this week, management announced the group had won £1.7bn in new business since the half-year stage. Its Middle Eastern construction business also put in a healthy performance, with revenue increasing by more than half to £362m. However, pre-tax profits were flat due to a series of one-off costs and margins also dropped as a result of higher contract mobilisation costs.