The second-biggest construction firm in the UK, Carillion is under investigation by the Financial Conduct Authority (FCA). The FCA is currently looking into the ‘timeliness and content’ following the contractors official announcements from December 2016 to July 2017.
During this period, the contractor’s share price plunged and the chief executive of the business, Richard Howson also departed following a series of profit warnings, which in turn sent the company’s shares down by around 40%. In July 2017, Carillion also announced that it was writing off the £845m in revenue it had expected from several large contracts and admitted that their borrowings were becoming much bigger.
Following another profit warning in November of last year, Carillion warned that it would breach debt covenants; however an agreement with lenders was made in December to help give the contractor more security. The major construction supplier is said to be co-operating well with the FCA.
With this in mind, it is really important to ensure that your business is protected against any potential insolvency or inability to pay from customers. For more information about what Credit Insurance Policy is best suited to your business and the services you offer, please speak with one of our specialist advisors on 01275 817320.