James Moore on services giant Carillion

We shouldn’t be too critical of the company for having a second bite at the cherry when it comes to spending pledges

The construction and services giant Carillion has thumbed its nose at the short-sellers who have been betting big on a tumble, by announcing £1.7bn of new business wins since its half-year results.

In this country alone there are roads, there is rail, and – oh look, there’s the Midland Metropolitan Hospital, that is expected to generate £600m in revenue … which was actually announced in August. But perhaps we shouldn’t be too critical of the company for having a second bite at the cherry, given how fond its biggest customer – the UK Government – is of doing the same thing. Particularly when it comes to spending pledges.

“Wherever you go we’re there,” the company declares boldly in a glossy corporate video on its website, designed to tempt everyone from potential employees to investors to buy into its vision of corporate nirvana.

But it is the new business announcement (or re-announcement) that has really caught the eye of the latter. The shares put on a sprightly 4 per cent in response to it. Certain hedge funds are in danger of getting their fingers burnt if the trend continues.

But will the taxpayer get burnt along with them? Well that’s the interesting question. Carillion touts its fancy systems for contract oversight, which it says mean that just two directors on its main board can keep tabs on the lot of them.

That’s quite a claim given the sheer number of them – this is a company that books annual revenues of more than £4bn, and employs 46,000 people.

Unfortunately the chief executive Richard Howson is not Superman. And his finance director Richard Adam is not The Flash.

Which means that things sometimes go wrong, and when they go wrong they go badly wrong. Take the company’s hospital contract in Swindon. This led to Carillion being sharply criticised last year by the hospital trust’s board, the Care Quality Commission and the GMB union.

Carillion says it’s worked hard to fix things, but employment tribunals are pending, which could see some dirty laundry washed in public.

The shiny new hospital contract, of course, will be managed though what’s become known as PF2, the Government’s new way of managing the private sector’s involvement in public projects.

It is supposed to correct the many faults that emerged with the bewildering array of things built under the system used by the last Labour government.

I’ve spoken to Carillion about it, and it won’t surprise anyone to learn that it puts a rosy glow upon it, arguing that it should work for both the taxpayer and for the company.

We’d better hope that it does. The problem that still exists with these schemes, whether under the old or the new system, is that if the shine comes off them we will still be stuck with them, and for years to come. Unless the taxpayer is willing to pay an extremely high price to create an exit.

You poll if you want to ... it’s analysis that counts

When companies put out financial results or trading statements there is almost always a “but” to be found somewhere, however good the numbers look at first glance. Turnover and profit might be up, but what about margins? The business might be growing like a train, but what about that mountain of debt?

YouGov might be one of those rare exceptions that proves the rule. So no buts at all? Not quite. It’s just that the financial effect of it is negligible. I’m talking, of course, about the way YouGov got the general election result completely wrong.

UK election polling provides a tiny fraction of the group’s revenues. But it’s very visible. As YouGov’s trading statement amply demonstrates, companies are still beating a path to its doors. One reason for that might be because the company appears to take its failure rather seriously. It is preparing to release a full-scale post mortem into what went wrong.

The top brass remained coy about what the review might say when I talked to them yesterday. But when YouGov asked people which they would rather see in power – a coalition led by David Cameron or one led by Ed Miliband – the former was favoured by a margin of 14 per cent. Which was completely out of step with what people were telling YouGov about their actual voting intentions. The importance of that was missed.

In a world ever more obsessed with surveys, statistics and “big data”, this leads one to ask if things are being missed in the analysis of data provided to companies?

The deep “granular” analysis that YouGov does is dazzlingly sophisticated and can be quite fascinating. Its look at the Germans and their likes and dislikes recently produced a bestselling book, some 27,000 copies of which were sold in just five days. Big data like this can be very seductive, and big business has certainly fallen in love with it (which means big profits for YouGov).

The problem is not so much with the data itself, it is how it is analysed and interpreted. When that falls down, things can go badly wrong, as the election debacle demonstrated.

Occasionally, therefore, it might just serve progressive companies to step outside of it completely.

Customers, after all, are not just statistical constructs that can be conveniently wrapped up and boxed. They are individuals. YouGov’s research would probably tell its clients that they would respond rather well to businesses that recognise that fact.