Carillion's final turnaround plan published by MPs

 
Oliver Gill
Follow Oliver
Carillion's top execs were grilled by MPs this morning (Source: Parliament.tv)

Carillion's final "recovery" business plan was this afternoon published by a joint parliamentary inquiry.

The 100-page document from January lays bare the uphill struggle Carillion was facing as it attempted to persuade lenders to plug a funding gap believed to be in the region of £300m.

The presentation highlights "our people" as Carillion's greatest asset.

In summary, however, the report found:

[Carillion] had become too complex with an overly short-term focus, weak operational risk management and too many distractions outside of our ‘core’.

Read more: Carillion would have survived but for problem contracts, says ex-boss

Carillion planned to dramatically downsize operations, reducing revenue from the £5.3bn reported in March 2017 to £3.5bn with operating profits of £92m in 2018. But with the complicated way the contractor accounted for profits, this would still lead to negative cash flow of £32m over the year.

Working capital – the amount of cash needed to finance operations – would not be positive until 2021 under the plan.

Rachel Reeves and Frank Field, co-Chairs of the joint BEIS and Work and Pensions Committees inquiry into Carillion, said in a written statement:

"This morning a series of delusional characters maintained that everything was hunky dory until it all went suddenly and unforeseeably wrong.

"We heard variously that this was the fault of the Bank of England, the foreign exchange markets, advisers, Brexit, the snap election, investors, suppliers, the construction industry, the business culture of the Middle East and professional designers of concrete beams. Everything we have seen points the fingers in another direction - to the people who built a giant company on sand in a desperate dash for cash."

Read more: Sacked Carillion workers told to pay £25 to keep their mobile phones

Related articles