Tips of the Week 

Carillion suspends dividend as balance sheet creaks

Carillion suspends dividend as balance sheet creaks

Carillion (CLLN) effectively rendered itself ‘Condemned’ in the market’s eyes after it reported the triple whammy of a profit warning, debt problems and the departure of chief executive Richard Howson. The shares plummeted by over a third in early trading. The construction and support services company revised down overall performance expectations, with revenue now expected to be between £4.8bn and £5.0bn. Average net borrowing for the first half is now expected at £695m – higher than the total figure of £586.5m for 2016. Following relatively positive full-year results, Carillion has failed to deliver on its sensible targets set in March – including bringing down full-year average net borrowing through cash generation and better capital allocation. Analysts at Liberum reduced their 2017 EPS estimates by 27 per cent to 25.6p, describing Carillion’s balance sheet as "a mess" that will "continue to overshadow the business".

To continue reading, subscribe today

and enjoy unlimited access to the following:

  • Tips of the Week
  • Funds coverage
  • Weekly features on big investment themes
  • Trading ideas
  • Comprehensive companies coverage
  • Economic analysis
Subscribe to Investors Chronicle

Subscribe today

Full access for just £3.37 a week:

• Tips and recommendations - to beat the market 
• Portfolio clinic & Mr Bearbull - build a well-planned portfolio 
• Expert tools - track and manage investments effortlessly
• Plus free delivery to your home or office

Subscribe Now