Derbyshire company warns of 'adverse financial impact' after Carillion collapse
A Derbyshire company has warned it faces an 'adverse financial impact' after it revealed it had a Â£1.6million exposure to collapsed construction giant Carillion.
Carillion plunged into compulsory liquidation on Monday, causing uncertainty for its 20,000 employees across the UK and owing an estimated Â£1billion in unpaid costs to as many as 30,000 businesses.
In a statement to the London Stock Exchange, Pinxton-based engineering firm Van Elle - which carried out regular work for Carillion as as a sub-contractor on rail improvement and maintenance work for Network Rail - said it had not been paid for work it did in December.
The company estimated that the outstanding debt and work-in-progress exposure was Â£1.6m.
At 1.50pm today, Van Elle's share price was down 17 per cent at 88.35p.
The statement added: "The group will engage with Carillion and its advisers, including the official receiver, to determine the status of outstanding payments, but shareholders should note that, in the event that Van Elle is unable to recover any monies owed, there would be an adverse financial impact on the group.
"The group's order book includes further expected work with Carillion for the remainder of the current financial year and beyond.
"In total, this represents approximately Â£2.5m of anticipated revenue for the second half of the current year.
"It is too early to say whether there will be any effect on the commencement or completion dates of contracted work with Carillion or what impact these developments will have on future work programmes, either in the rail sector or elsewhere, but the group will monitor the situation closely and make further announcements as necessary."
Jon Fenton, chief executive of Van Elle, said: "While it is disappointing to note the Carillion announcement we continue to develop further our strong relationship with Network Rail and its principal contractors.
"We remain committed to developing high quality solutions in the rail division both for upgrade and maintenance work."