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Tue September 25 2018

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Balfour takes £40m hit on Carillion collapse

15 Jan Balfour Beatty says that the collapse of Carillion is set to cost it between £35m and £45m.

Balfour Beatty is in joint venture with Carillion on three projects: the Aberdeen Western Peripheral Route, the A14 in Cambridgeshire and the M60 Junction 8 to M62 Junction 20 scheme.

Balfour Beatty said that it will continue to work with its customers and will meet its contractual commitments.

However, the cash impact to Balfour Beatty “is likely to be an outflow in the range of £35m to £45m in 2018”, the board has revealed.

This will be recorded as an exceptional non-underlying charge in its income statement.

Galliford Try is the third member of the joint venture contracting team on the £550m section of the Aberdeen bypass between Balmedie and Tipperty.

The terms of the contract are such that, with the demise of Carillion, the remaining joint venture members, Balfour Beatty and Galliford Try, are obliged to complete the contract.  Galliford Try said: “Our current estimate of the additional cash contribution outstanding from Carillion to complete the project is £60-80 million, of which any shortfall will be funded equally between the joint venture members.”

It added: “The companies will discuss the position urgently with the official receiver of Carillion and Transport Scotland [the client], to minimise any impact on the project.”

MPU

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