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Howson and the board managed to safely navigate an annual general meeting in May. But on 10 July the charade was over, after a partial review by auditors KPMG identified £845m of contract write-downs.
Analysts worried further hits could be on the cards once the review was completed. They estimated shareholders would be asked for £500m. Howson was shown the door and hopes were pinned on the experienced Cochrane to steady the ship.
“The balance sheet is a mess,” wrote Liberum analyst Joe Brent. Peel Hunt’s Andrew Nussey advised Carillion’s “shares are best avoided until management provides further insight”.
The Carillion insider says the reaction from within the firm was one of shock. “There was disbelief from the staff generally. Nobody on my management team could believe the scale of the issues at hand.”
“We all knew the accounts were questionable; it was the most shorted stock in Europe,” a leading City analyst told City A.M. “But the extent of the problems were gobsmacking.”"