On 1 March 2017, Carillion published accounts showing a profitable company and paid a record dividend. Four months later it issued its first profit warning. On 15 January 2018, the UK's second largest construction company went into compulsory liquidation, owing around £2 billion to some 30,000 suppliers, subcontractors and other short-term creditors.
To the public, the collapse looked sudden. Subcontractors had seen warning signs much earlier. In 2013, Carillion moved to 120-day payment terms, with payment at 45 days only through a discounted bank facility, almost five years before it failed.
Our first lessons learned report tells the story in plain English, using the MPs' inquiry, the National Audit Office, the regulators' findings and the liquidators' updates.
The numbers
- About £2bn owed to suppliers and subcontractors when it collapsed
- 120 days: its standard payment terms
- About 6 months from its first profit warning to liquidation
- Nearly £7bn vs £29m: its liabilities against the cash it had left
Every figure in the report is sourced, with links to the original documents.
What's in the report
- How Carillion grew into the UK's second largest construction company
- The six months from first profit warning to liquidation, date by date
- The causes the official investigations found
- The warning signs, when each became visible, and whether a subcontractor could have seen it
- What happened to the subcontractors and suppliers who were owed money
- The fines, director bans and payment rule changes that followed
- The 12 checks to make before you work for a main contractor
The headline figures and the summary are free to read. Create a free account to read the full report.
Why we wrote it
Carillion is one of 229 larger UK construction failures in our failures register. Most of the warning signs in the report can be checked for any contractor today: payment terms and payment records, late accounts, profit warnings and the news. Every company page on Construction Rating shows its CR Signals, and the payment league table compares how quickly contractors pay.
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