Carillion has lost more than £1 billion during the first half of 2017.

In its financial results for the six months ended 30 June 2017, the company made a pre-tax loss of £1.153bn with revenue sitting at £2.5bn.

In addition, despite no change being made to a previously announced £845m provision for problem construction contracts, the Group announced a further £200 million provision to cover losses for support services contracts.

Elsewhere, there is a goodwill impairment charge of £134m in respect of UK and Canadian construction businesses.

Carillion blamed underlying pre-tax profit being down 40% due to the phasing of PPP equity disposals and the trading of contracts with H1 provisions at zero margin.

-- Advertisement --

Interim chief executive Keith Cochrane has now launched a business restructuring programme which is expected to cost up to £100m by the end of the year.

He said the Group now expects results for the full year "to be lower than current market expectations".

"This is a disappointing set of results which reflects the issues we flagged in July and the additional £200m provision for our Support Services business that we have announced today," he said.

"The Strategic Review that we launched in July has enabled us to get a firm handle on the Group's problems and we have implemented a clear plan to address them. Our objective is to be a lower risk, lower cost, higher quality business generating sustainable cash backed earnings. In the immediate short term, our focus is to complete the disposal programme, accelerate our action to take cost out of the business and get our balance sheet back to a place where it can support Carillion going forward.

"No one is in any doubt of the challenge that lies ahead. We have made an encouraging start and the ambition is there to build on that progress. At the heart of this company, there is a strong core. Supported by an operating model that manages risk much more effectively and led by a fresh management team with a mandate to drive cultural change, I am confident that a strong business can emerge."

(LM)