Alain Michaelis says bust firm got caught out by diversifying too much
Carillion collapsed because it diversified too much into areas where it don’t know what it was doing, according to the boss of a FTSE 250 rival.
Keller chief executive Alain Michaelis, who yesterday announced a record £2bn turnover at the ground engineering specialist, said peers would do well to learn lessons from the firm’s demise – rather than think it was a one-off.
“The lesson for [the industry] is stick to your knitting, know what you’re doing and don’t go too far away from your core,” said Michaelis, who joined Keller from Rolls Royce, where he was group operations director, back in 2015.
He added Carillion was caught out because it was carrying out work in fields it was not an expert in. “We have a low exposure to subcontractors doing stuff we don’t understand,” he said.
Michaelis said Carillion had been in touch with Keller to help them out with a hotel job in Abu Dhabi but nothing came of it, adding: “We were too expensive for them.”
He also said Carillion’s due diligence on schemes may not have been up to scratch. Keller carried out 6,300 contracts last year but Michaelis said it keeps tabs on all of them. “We do quite a lot of credit control and on big jobs we get advanced payments.”
He added that Keller, which posted a 50% hike in pre-tax profit to £111m, was not owed money by the bust firm.