Van Elle has warned it will suffer if it is not paid for the work it undertook for Carillion in December 2017 and for any current work-in-progress.
Van Elle, which regularly worked with Carillion on Network Rail projects, has confimed that it has not been paid for £1.6M worth of work it undertook in December and work-in-progress.
In a statement the firm said: ”The Group successfully undertook several contracts for Carillion during December in respect of which, payment has been applied for but not yet been received, and work has continued on some of these contracts into January 2018. As a result, Van Elle’s outstanding debt and work-in-progress exposure with Carillion is approximately £1.6m.”
The company has confimred it will engage with Carillion and its advisers, including the official receiver, to determine the status of outstanding payments, but warned shareholders that in the event that it is unable to recover the money 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 £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” it said.
Shares in Van Elle fell by 10% earlier today.
Van Elle’s chief executive Jon Fenton added “While it is disappointing to note the Carillion announcement we continue to develop further our strong relationship with Network Rail and its principal contractors, and remain committed to developing high quality solutions in the rail division both for upgrade and maintenance work”.
GE reported earlier today that Carillion suppliers have fewer than 48 hours of government support.