Carillion

Kier 'won't be another Carillion'

Today Programme

BBC Radio 4

Kier building site
Getty Images

Yesterday yet another British government outsourcer Kier announced that it was in trouble.

Kier said it will cut 1,200 jobs and sell its homebuilding business, Kier Living, as well as shutting or selling other interests, including its recycling and rubbish processing units.

But will it go the same way as Carillion, which went bust in January last year?

Stephen Rawlinson, an analyst at Applied Value, doesn't think so.

"I don't think anyone wants to see another Carillion, because they realise that making these companies go into administration is expensive in itself, but not withstanding that, there is insufficient competition in the UK anyway to build the assets for the schools, the roads, the hospitals that we all need in our everyday lives," he told BBC Radio 4's Today programme.

"But also it actually has physical assets it can sell. It can sell the land, it can sell the property, but it's not a great time to do it, so it may well be that it has to sell more assets than was announced yesterday."

The Mayor of Liverpool demands answers to the latest problems at the stalled hospital.
The Mayor of Liverpool demands answers over new problems at the un-built Royal Liverpool Hospital.

Competition watchdog recommends accountancy market revamp

BBC Business News

The UK's competition regulator has recommended a major shake-up of the UK's accountancy market.

Carillion sign
AFP

Alarm bells have rung over recent accountancy blunders, such as the collapse of Wolverhampton-based Carillion, which was audited by KPMG.

The Competition and Markets Authority (CMA) said auditing and consultancy services should be entirely separate.

But it has stopped short of calling for the Big Four accountancy firms to be broken up.

However, industry bodies criticised the proposals, with one saying there was no evidence that they would lead to better audits.

New Kier boss was hoping to be Carillion chief

Kier
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What a difference a year makes.

Andrew Davies had expected to become chief of Carillion before the company collapsed just over a year ago.

Today the former chief executive of Wates has been named as chief executive of infrastructure giant Kier.

He replaces Haydn Mursell who stood down in January after investors failed to back Kier's £250m fund raising plan. Barely a third of the shareholders in the outsourcing firm backed the rights issue.

Mr Davies said: "I look forward to leading Kier in bringing a renewed focus on simplifying the Group, improving cashflow generation and reducing net debt, while maintaining the group's disciplined approach to risk management."

Carillion auditing probe extended by watchdog

Carillion sign
PA

A probe into the auditing of collapsed construction giant Carillion has been extended back a further year by the UK accounting watchdog.

The Financial Reporting Council (FRC) said its inquiry into the preparation, approval and auditing of Carillion will now also cover the year 2013. The FRC is already looking into KPMG's audit of Carillion for the years 2014 to 2017.

The FRC has already said its original investigations will continue "well into 2019".

It launched investigations in January and March last year into KPMG's audits of Carillion, as well as the conduct of two former finance directors, Richard Adam and Zafar Khan.

The FRC is looking into the financial performance of Carillion's major contracts across the construction and services divisions, and whether management and KPMG ensured this was appropriately reported in its financial statements.

Pension liabilities and cash disclosures are also areas being investigated.

Serco: Eeyorish happiness

Today Programme

BBC Radio 4

Eeyore follows the guards on the Forecourt of Buckingham Palace for the Queen's 80th Birthday
Getty Images

Rupert Soames, the chief executive of Serco, has been speaking to BBC Radio 4's Today Programme after the outsourcing company published 2018 results.

Such companies have been in the spotlight recently after the collapse of Carillion and problems at Interserve.

Mr Soames joined Serco in 2014, when it was facing financial difficulties and now says the company is at a turning point after two years of increased orders and 80% of the business coming from overseas.

"We were early adopters of financial carnage. When we got into trouble way back in 2014 when I came into the company with some colleagues to try and turn it round we’ve had our dark night of the souls as well, but after four and half years of hard slog it looks like the tanker is turning".

"In an Eeyorish-kind of way we’re cheerful in a miserable kind of way," he said.