Carillion shares drop as it faces investigation by the Financial Conduct Authority over company announcements

 
Rebecca Smith
The firm said it was cooperating fully with the FCA
The firm said it was cooperating fully with the FCA (Source: Carillion)

Carillion said this morning it is facing an investigation by the City watchdog over announcements made by the firm over the first half of last year.

In a statement, the London-listed company said the Financial Conduct Authority had 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," the company added.

Shares in Carillion were down nearly four per cent in morning trading.

Read more: Revealed: Behind the scenes of Carillion's annus horribilis

The construction company has had a bumpy year - its share price has tumbled after it revealed hefty contract write-downs and announced in July that its former chief executive Richard Howson would be stepping down.

It then announced in November that its finances would not be in compliance with the terms of lending from banks.

Compliance with its financial covenants had been dependent on achieving underlying forecasts, which it said were impacted by a number of troubles.

Carillion flagged "delays to certain PPP disposals, a slippage in the commencement date of a significant project in the Middle East and lower than expected margin improvements across a small number of UK support services contracts" as reasons for profit for the year to come in lower than expected.

It received a boost last month though, with lenders agreeing to defer the testing of its financial covenants.

Read more: Carillion's Christmas present: Banks give contractor breathing space

Incoming boss Andrew Davies is taking the reins as chief executive later this month - earlier than originally intended.

Davies was initially expected to take over from interim boss Keith Cochrane in April, but it was announced last month that Davies will now head up Carillion from 22 January.

Carillion is contracted to deliver some of Britain's major infrastructure developments, including work on the £56bn HS2 rail project.

Read more: Carillion’s banks were left on the sidelines while shares plummeted

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