Kier share price slides after recording £245 million full-year loss
The construction group’s performance continues to worsen, raising concerns among investors and the wider industry that it could end up on the scrapheap like ex-rival Carillion.
Kier Group saw its share price tumble more than 7% to 116p early on Thursday after recording a £245 million full-year loss.
The construction group has had a tough 12 months of trading, as concerns mount over the strength of its balance sheet as the business embarking on an expensive restructuring plan.
But despite a disappointing performance, the company is capable of surviving, with the business boasting a strong order book, reflecting the strength of its underlying business.
Kier Living sale will help restore group’s ‘financial health’
In a bid to rescue the business, Kier completed a £250 million rights issue in December last year to strengthen its balance sheet.
Since then, the company has put a new management team in place and simplified the overall structure of the group around its regional building, highways, utilities and infrastructure businesses.
The group continues to progress with its sale of home building unit, Kier Living, and exploring options to accelerate the release of capital from its property business.
‘The re-shaping of the Group is designed to reduce its overall indebtedness during FY2020 and to restore Kier to robust financial health,’ Kier Group CEO Andrew Davies said.
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Kier suspends dividend
The construction group’s accelerated cost-cutting plan will see it reduce its headcount by circa 1,200 employees by the end of 2020, with the business looking to generate annual cost savings of around £55 million from 2021.
As part of its cost cutting measures, Kier also told shareholders that it will suspend its dividend for 2019 and 2020.
‘Kier experienced a difficult year, resulting in a disappointing financial performance,’ Davies said. ‘However, we are building firm foundations for the future: we have a new management team in place, we have defined our strategic priorities and we are taking decisive actions to deliver them.’
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