Kier Group reports losses of £35m as turnaround strategy continues
Kier Group, the infrastructure services, buildings and developments and housing group, reported a loss of more than £35m for the second half of 2018, just as a new CEO is appointed.
For the six months ending 31 December 2018, the group reported statutory pre-tax losses of £35.5m, and underlying operating profit also fell to £51.8m from £60.6m the previous year.
Kier’s underlying revenue, however, managed to slightly increase during this period, marking a 2% rise from £2.1bn to £2.2bn.
As of 31 December, the group’s order book also stood at £10bn after winning £2.1bn worth of new contracts in this time.
Employing over 300 people across Yorkshire, Kier is currently on site delivering St Albans Place – a £29.5m, 18-storey student accommodation in Leeds city centre for Select Property Group. In Sheffield, Kier is on site at Astrea Academy, which is a new £25m through-school.
Kier has also recently been awarded a four-year contract to upgrade 11,000 homes in the South Yorkshire. It also carries out all repairs and maintenance works to 19,000 Barnsley Council homes as part of the Property Repairs and Improvement Partnership (PRIP) with Berneslai Homes Construction Services.
In addition, the company said the Future Proofing Kier (FPK) programme delivered savings of £4mln in the first half, with implementation costs of £14m.
The programme, which aims to streamline the business, drive operational efficiencies and improve profitability, is expected to be earnings and cash flow neutral in the full-year results for 2019, with annual savings of £20mn anticipated in 2020.
Earlier this week, Kier named Andrew Davies as its new chief executive, with effect from April 15.
Philip Cox, executive chairman, said: “Our regional building and property development businesses continue to operate well, although we are experiencing some volume pressures in the highways, utilities and housing maintenance markets.
“The Board continues to focus on simplifying the Group, improving cash flow generation and net debt reduction, and forecasts a net cash position at 30 June 2019.
“Whilst the Board notes the current political and economic uncertainty in the UK, and the implications for third party investment, the Group is maintaining its underlying FY19 expectations, with the full-year results being weighted towards the second-half of the financial year, as expected.”
