Construction group Galliford Try announced on Wednesday it was to launch a cash call on investors to raise £150m in new share issues to help prop up its balance sheet following last month's collapse of joint venture partner Carillion.
The mid-cap company said that Carillion's demise left it nursing losses relating cost overruns on a joint venture that also included Balfour Beatty in Aberdeenshire.
Shares in Galliford Try fell as much as 21.4% in opening trade as the company delivered its financial first-half earnings. It had previously predicted a hit of £40m relating to the Carillion collapse, and charged £25m of this to its first-half results.
- Revenues in the six months to 31 December rose 14% to £1.5bn compared with H1 2016
- Pre-tax profit fell 11% to £56.3m due to the £25m charge related to Carillion
- Pre-exceptional profit before tax rose 29% to £81.3m
- Dividend cut to 28p from 32p
- Net debt falls to £84.9m from £113.8m
Peter Truscott, chief executive (left), said: "We have delivered a strong financial and operational performance in the first half, with revenue growth across all three businesses and excellent progress against our 2021 strategy.
"We have reviewed the impact on our business from the compulsory liquidation of Carillion, which has resulted in a further reassessment of the likely out-turn from our participation in the Aberdeen Western Peripheral Route (AWPR) joint venture, leading to an exceptional charge of £25m.
"Reflecting the additional financial obligations arising from this contract, we have today announced our plans for a capital raise of £150m."
The company said Rothschild would be acting as advisor on the capital raising.
By mid-morning on London Stock Exchange, shares in Galliford Try were down 16.41% at 825.4p.
Picture courtesy of Galliford Try website