Cheer for beleaguered Carillion as group lands £300m development contract

BUILDING FIRM Carillion has been named as the main contractor on a £300m Manchester property development.

The contract win represents a vote of confidence from contractors and customers in Carillion’s ability to deliver on projects after the firm lost nearly 80 per cent of its market value last month following a profit warning.

Property group Ask Real Estate, which is developing the Manchester project, confirmed separately that Carillion was the contractor for the development, which will include a hotel and offices built on a 1.74-acre site next to Manchester Central convention centre and the Hilton Tower.

The construction and support services company’s shares were up nearly 7 per cent and were the biggest gainers on London’s FTSE midcap index.

Carillion booked an £845m writedown on problematic construction contracts and said Richard Howson would step down as chief executive. Mr Howson has since been named chief operating officer.

There has been speculation that the company may have to raise at least £500m and could announce a rights issue alongside its results on September 29.

Ask had estimated last year that the project, to be built on the former Bauer Millett car showroom site, could comprise over 750,000 square feet of development at a projected value of about £300m.

A spokesman for Carillion confirmed that the company was the main contractor on the project, declining to give any further details.

Carillion, the second largest contractor for the British government, has won multiple public contracts since its July profit warning, including work worth £1.4bn to help to build Britain’s High Speed 2 railway.

Under the Manchester contract, Carillion and Ask will work in partnership with Transport for Greater Manchester, Manchester City Council and Manchester Central.