Carillion downsizes energy unit due to low Green Deal uptake

 
Suzie Neuwirth
FTSE 250-listed support services and construction firm Carillion yesterday said that it would be downscaling its energy services division, after the government’s Green Deal failed to take off.

The company said it would take a £40m charge as a result of the restructuring.

Numbers of people signing up to the government financing scheme for people who wish to install energy-saving measures in their homes has fallen painfully short of targets and critics have lambasted the initiative, claiming that high interest rates are deterring people.

The government has introduced a parallel scheme, the Energy Company Obligation (ECO), which mandates energy companies to install a target number of energy-saving measures in customers’ homes.

“The development of the Green Deal market continues to be slow and ECO may now be subject to further delays,” said Carillion in a statement. “Consequently, we will restructure this area of our business during the remainder of 2013 to ensure that it is aligned in size to the markets in which it operates.”

Carillion added that trading in the third quarter was in line with expectations. It also said it had won contracts in Canada and Oman.

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