Union demands assurances Carillion jobs are safe
The UK’s largest union is seeking urgent talks with senior management at Carillion for assurances that its members’ jobs are safe.
Unite was responding to fresh concerns about the future of the Wolverhampton-based business following a renewed profit warning and fears it would breach financial covenants by the end of the year.
The embattled business emerged from a bruising day on the markets on Friday, which saw shares dip almost 40% to close at 25.00p (a decline of 39.76%).
However, even that grim statistic represented something of a recovery after a fall at one stage of more than 56%.
Earlier in the day it had said in a trading update that was aiming to defer the testing of its financial covenants until April 30 next year because hoped for revenues were unlikely to be achieved in time for December 31.
It also said it expected full year average net borrowing in 2017 to be between £875m and £925m.
The announcement sent out alarm bells to investors but the repercussions are being felt much wider.
Unite represents around 1,000 workers at the company, while it has many more in its supply chain.
Unite national officer for construction Bernard McAulay said: “Unite has hundreds of members at Carillion all of whom will be highly concerned about the company’s financial situation.
“Aside from the directly employed workforce there are significantly more who are employed by sub-contractors and agencies on Carillion sites throughout the country.
“It is vital that the senior management of the Carillion Group sits down with Unite and provides a warts and all prognosis of the company’s long-term future in order for our members to be properly informed of what the future holds. They need to know how Carillion intends to deal with its current financial crisis.”
The business received some respite when it announced it had been awarded two lots on the Education & Skills Funding Agency’s school building framework.
The new framework is for a four-year period and replaces the existing ESFA Contractors Framework, on which Carillion was also a provider. The framework provides a procurement route for education providers to access pre-selected contractors to deliver new education facilities.
Carillion has been appointed on both lots it bid, covering the north and south of England, for high value projects (worth more than £12m). These are anticipated to be worth around £2.64bn over the period to 2021, with the group one of nine contractors selected.
Keith Cochrane, Interim Chief Executive, said: “We are pleased to have re-secured our position on this framework, demonstrating that we continue to retain the confidence of key customers despite the group’s current challenges.”