Carillion sells contracts.

the boot

Winger
Carillion this morning sold off part of its health care building contracts to rival serco.
I read the article but can't quite grasp it, how is this saving them?
 


Carillion this morning sold off part of its health care building contracts to rival serco.
I read the article but can't quite grasp it, how is this saving them?

Because they are losing money on the contracts I believe. It's not core business and a field they were looking to expand into. They currently cant afford the investment that would take so are stripping back these arms to business and focussing on its core strengths of Services (commercial generally) and Construction.
 
Rumour also has it that the construction arm is currently in receivership with an announcement due in January
 
Carillion this morning sold off part of its health care building contracts to rival serco.
I read the article but can't quite grasp it, how is this saving them?

Likely losing money on them. Facilities contracts are very competitive with the likelihood too much has been taken out the contract bid price. If a contract is loss making then it is quite possible the loss on the whole contract life has to be provided for in the next financial year end, i.e. Account for future losses of x number of years left on the contract
Quite a few facilities companies are having these type of issues
 

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