Register
 (photo: )
16.05.2018, 14:29

Work and Pensions Committee Report on Carillion

Industry & Regulatory News, Company News, EMEA
Mar Beltran, senior director and Infrastructure sector lead, EMEA, for S&P Global Ratings comments on the Work and Pensions Parliamentary Committee’s report into Carillion's collapse.

 

“In light of the findings delivered in the final report, there are lessons to be learned for the U.K.’s construction and facilities management sectors. Companies should strive to adopt more transparent accounting practices, particularly with respect to their use of reverse factoring (supply chain finance). This will be critical to ensuring that the market receives a fairer representation of a company’s health through financial statements. A further challenge comes from the subjective nature of revenue and profit recognition in long-term construction contract accounting.”

 

“Though companies are not always required to disclose their use of reverse factoring, it is important to note that reporting of such arrangements is paramount when their impact is material. We believe that Carillion's financial adjusted debt –to reflect its extensive use of reverse factoring – would have been significantly higher than its financial statements had suggested.”

 

“Under S&P Global Ratings’ criteria, poor management and governance practices are among leading causes of weakened creditworthiness. Although we did not rate Carillion, today’s report suggests that the most significant contributors to Carillion’s demise were its poor risk management practices, such as aggressive bidding. We believe these practices led to major construction project impairments and a decrease in its operating margins. Further pressure came from Carillion’s extensive use of the U.K. Government's supply chain finance (SCF) scheme as both a source of financing and an early payment facility. This kept the company’s fragile financial situation hidden for longer.”





Article rating:

vote data

Leave a reply

 (photo: )
Online Editor  - 10.10.2018, 07:57

Celebrating World Mental Health Day 2018

Leading businesses share their thoughts on World Mental Health Day, the initiative first introduced by the World Federation for Mental Health (WFMH) in 1992 to destigmatise and raise public...

 (photo: EuroFM)
EuroFM (European Facility Management Network)  - 14.06.2018, 18:23

A Successful EFMC 2018

More than 300 leading global facilities management professionals from over 40 countries attended the 26th Edition of The European Facility Management Conference (EFMC) at The Sofia Event Center in...

 (photo: Abintra Consulting)
Tony Booty  - 17.01.2018, 12:57

The New Rules of Meeting Room Etiquette

Tony Booty, director of workplace flexibility specialist Abintra, takes a long-overdue look at the rules of meeting room etiquette in light of advances in office technology and the growth of...

(Photograph courtesy of Tookapic). (photo: )
Marissa Francis  - 05.03.2018, 17:13

The Definition of 'Clever'

Marissa Francis, Heating Ventilation and Air Conditioning (HVAC) Improver with ABM UK, explains why university isn't the only route into facilities management.

New chargepoint installation at Southampton Airport. (photo: Southampton Airport)
AGS Airports  - 26.03.2018, 11:30

Southampton Airport Adds EV Chargepoints

Southampton Airport is helping power the growing number of electric vehicle (EV) drivers on UK roads with the installation of seven new Pod Point 7kW chargepoints in its short stay and priority...

Penn State University. (photo: )
FM Editor  - 03.04.2019, 19:36

BACnet Site Manager for Big Building Networks

Vancouver, BC based Optigo Networks will be releasing its Visual BACnet Site Manager aggregation tool for different capture nodes across building and campus networks on 25 April. The tool was...

 (photo: Seeley International)
Seeley International  - 21.12.2018, 09:56

Climate Control Middle East Award for Alsaeed HVAC

Seeley International is proud to announce its distributor in Saudi Arabia, Alsaeed HVAC, has been announced as the winner of the Editor's Choice award at the Climate Control Middle East awards for...