Carillion's Problems Were Well Flagged

THE WEEK: Morningstar columnist Rodney Hobson says that when profit warning follows profit warning investors need to face reality

Rodney Hobson 19 January, 2018 | 3:01PM

Carillion

Reams have already been written about the demise of Carillion (CLLN), and with it, one would like to hope, the disastrous PFI programme, but one point is worth noting. It is rare indeed for any company in the UK to go bust without there being ample warning signs over several months. If you stay in as a shareholder against all reason then I’m afraid you have to take what is coming to you.

Way back in August 2015, after David Cameron’s election victory which now seems like a distant dream, I tweeted that Carillion’s share price underplayed its contract wins. But you always have to take into account changing circumstances, and the unexpected Brexit vote plus Theresa May’s disastrous election campaign certainly changed the political landscape even without the main cause of Carillion’s demise, its hapless management.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
Carillion PLC14.20 GBP0.00
Carpetright PLC  
Dunelm Group PLC1,193.00 GBP0.00
Provident Financial PLC169.20 GBP0.00

About Author

Rodney Hobson

Rodney Hobson  is a columnist for Morningstar.co.uk and author of several investing books, including The Dividend Investor and How to Build a Share Portfolio.

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