After I did my MBA I worked as a Corporate Development Executive at George Wimpey PLC. At that time Wimpey had three divisions; house building, construction and minerals.
In November 1995, the Board announced a that Wimpey was to transfer its construction and minerals divisions to Tarmac in return for the latter's housing division.
In July 1999, Tarmac was demerged with the Construction and Professional services arms forming Carillion plc. (The aggregates and building materials side of the business retained the Tarmac name and was bought by Anglo American shortly afterwards.)
This morning Carillion went into liquidation.
Truth be told, even twenty odd years ago Construction made more money from interest on cash than profit on projects, which meant that it was in their interests to delay paying subcontractors as long as possible. I remember thinking that this was an unsustainable business model. I hope it is not how the business was run more recently or the fall out will be catastrophic.
Monday, January 15, 2018
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