Carillion crisis lands builder with £150m bill

SHARES in construction firm Galliford Try slumped 19pc yesterday after it sought £150m from investors to prop up its balance sheet.

The firm also said it would slash its dividend as part of efforts to cover a £150m overrun on a project to build a 36mile bypass in aberdeen.

It was left in the lurch after the dramatic collapse of Carillion last month, which it had partnered with on the scheme alongside Balfour Beatty.

The surprise call for cash sent shares in the company tumbling by as much as 20pc. They ended the day down 19pc, or 187.5p, at 800p.

Galliford Try said: ‘The group has sufficient financial resources to meet its obligations, including the estimated impact of Carillion’s liquidation. However, this would involve diverting capital away from [housing arm] Linden Homes and partnerships and regeneration businesses.’ It booked a £25m charge on the back of Carillion’s demise for the six months to December 31.

The aberdeen bypass, long behind schedule and over budget, was one of several schemes that pushed Carillion over the edge. It is due to be completed later this year.

aynsley Lammin, an analyst at Canaccord Genuity, said: ‘Recent events make investors increasingly wary of risks within contracting businesses.’

Galliford Try said a main reason for its cash appeal was that it did not want to sacrifice the success of Linden Homes, which boosted sales by 7pc, while its partnerships and regeneration arm saw revenue surge 55pc.

Revenue was up 14pc overall in the first half, with profits rising 29pc to £81.3m.

Peter Truscott, chief executive, said: ‘We have delivered a strong financial and operational performance in the first half, with revenue growth across all businesses.’