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The award of a new contract has offered little respite for investors in Carillion, with shares in the embattled construction and outsourcing group stuck near the lows hit after last week’s latest profit warning.
The company, which is one of the UK government’s largest contractors, said earlier on Monday that it is included in a framework for new school construction projects worth a total of £2.64bn over the next four years. Interim chief executive Kieth Cochrane said the award shows that Carillion “continues to retain the confidence of key customers despite the group’s current challenges”.
However, although Carillion confirmed the contract award on Monday, the Education and Skills Funding Agency announced its initial decision before last week’s warning that Carillion would breach its banking terms.
The government stressed on Friday that it remains “supportive” of the company, which is fighting for survival in the face of spiralling debts and massive writedowns on many of its contracts.
Shares in Carillion briefly gained as much as 11 per cent at the start of trading on Monday morning, but the rebound proved short-lived, and by publication time the stock was up just 1.2 per cent for the day. Shares in the company have fallen 90 per cent so far this year.