The Scottish Mail on Sunday

FTSE firms ‘cannibalis­ing’ their accounts

- By Adam Luck

BRITAIN faces a repeat of the Carillion collapse because big companies have ‘cannibalis­ed’ their balance sheets to boost dividends to shareholde­rs, a report has warned.

Firms have increasing­ly focused on artificial­ly driving up share prices using debt and takeovers, says think-tank Productivi­ty Insights Network.

It said the rate of increase in dividends and share buybacks over the past decade, which have

totalled £1trillion in that time, had far exceeded the rate of profit growth.

Professor Richard Murphy, one of the authors of the report, said: ‘Businesses that pay out more than they earn cannot survive in the long term.

‘What is happening in this country, in the FTSE, is a recipe for a flood of corporate failures like Carillion.’

Greedy bosses, corporate cover-ups, excessive dividends and accountanc­y failures were blamed for the failure of the constructi­on giant in 2018.

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