Shares in Carillion dive more than 40% on profit warning
Shares in Carillion have plummeted more than 40% and were temporarily suspended after the troubled construction group warned over profits and said it will breach its financial covenants.
The group said annual profits looked set to be "materially lower than current market expectations" as it grapples with a string of delays and smaller-than-expected improvements to margins on certain contracts.
Despite efforts to drive down costs, haul in cash and push through disposals, the group said it would fail to hit its net debt to earnings ratio of 1 to 1.5 times by the end of 2018.
As a result, the firm expects to breach its financial covenants by the end of December this year, with annual average net borrowing to come in between £875 million and £925 million.
Chief executive Keith Cochrane said: "Whilst we continue to target cash collections, reduce costs, execute disposals and focus on delivering for our customers, it is clear that significant challenges remain and more needs to be done to reduce net debt and rebuild the balance sheet.
"Constructive dialogue is continuing with our financial stakeholders, and I am grateful for their support.
"I remain focused on addressing this issue before my successor, Andrew Davies, takes up the role on April 2 2018."