Pinning down the finances of private companies can be a tricky task for City stakeholders.
Public companies, however, are mandated to keep investors and other interested parties entertained with a steady stream of financial updates.
When it comes to filing financial statements – the audited figures upon which financiers hang their hats – listed firms must lodge them with Companies House within half a year. Private firms have a better deal, getting an additional three months.
With Carillion’s dramatic failure catapulting the contracting sector onto the front pages this week, some analysts have been left scratching their heads about the finances of Britain’s biggest private contractor, Laing O’Rourke.
Currently, a red flag hangs over the firm at Companies House, and while they may not be a household name they built Olympic venues and Heathrow Terminal 5 while also refurbishing Leadenhall Market and Bond Street station.
Due to file March 2017 accounts by the end of December, Laing O’Rourke has negotiated an extra month with officials and Companies House has appointed a case officer to monitor the Hinkley Point C builder’s progress.
Lib Dem leader and ex-business secretary Vince Cable yesterday called Laing O’Rourke “one of our most celebrated contractors”.
“But this delay in filing accounts, and the possible reasons for that, is greatly concerning at a time when Carillion’s failures have highlighted the difficulties facing the construction industry. I hope that for the sake of Laing O’Rourke’s employees this is no more than a blip,” he added.
Laing O’Rourke waited until the Friday before Christmas (when stock markets had a half-day) to announce the sale of a troublesome Canadian contract, paving the way for accounts to be filed by the end of January.
The contract in question had “resulted in significant financial losses”. After losses of £267m in 2016 could PwC have given the firm a clean bill of health with the Canadian contract hanging over it? The evidence suggests not.
Given the level of scrutiny the contracting sector is now under, the Big Four accountant is probably grateful for the extra time to go over the books. One thing is for sure: assuming Laing O’Rourke keeps to its new filing deadline, analysts (and other interested parties) will be queuing up to get a proper look at the health of the company.