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The collapse of Carillion

Which alternative data providers saw it coming?

As the dust begins to settle on UK construction giant Carillion’s failure, now is good time to put our ‘benefits of hindsight’ hats on. Specifically, across Neudata’s coverage universe we evaluate which alternative data providers could have helped investors detect the group’s collapse.

Below we describe six very different offerings and the read-across between the output from their data and Carillion. Where possible, we have also asked each data provider for their own thoughts.

Identifying Carillion’s growing debt burden

As has been highly publicised, one of Carillion’s biggest issues in 2017 was that of increasing debt. By the end of 2017, average net debt reached £925m, +58% yoy.

Below: Carillion’s average net debt, £m

Source: Carillion, *Estimated by Carillion as of November 2017

What we find most interesting, however, is the fact that, between Carillion’s initial profit warning in July-17 and liquidation in Jan-18, the group (and its subsidiaries) won 10 public sector awards worth a total value of £1.3bn – further adding to the group’s debt burden and potentially revealing a failure by the government to appreciate just how much financial difficulty Carillion was in.

One data provider that would have not only spotted these contract awards (and as such the ever-growing debt burden), but also provided additional analytics,

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Analyst Contact

Daryl Smith, CFA Head of Research (London)