Carillion’s battered shares climbed for a second day on Monday, after the company appointed more advisers to help its turnround efforts and announced it has won some major contracts to work on the UK’s new high-speed rail line.
The FTSE 250 group, whose shares dropped more than 70 per cent last week, was awarded two contracts to work on the HS2 project as part of its joint venture with Kier and French group Eiffage.
The contracts are worth a total of £1.4bn over a more than five-year period, and Joe Brent at Liberum estimate around £450m of that will go to Carillion.
Mr Brent at Liberum said “it is encouraging that they can still win government contracts”, but stressed that the award will not fix its short-term problems:
“Our view remains that the business will survive but the ownership is likely to change significantly”.
To help with those short-term issues, the construction and support services group has appointed professional services firm EY to help it make sure it still exists by the time the contract is completed. Carillion said EY will focus on its efforts to cut costs and collect more cash to cut its massive debt pile.
Shares in the company rose as much as 11 per cent in early trading, and at publication time were up 5.5 per cent to 59p.