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Thu November 26 2020

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Clients keep faith with cost-cutting Kier

16 Jan Despite shedding more than a thousand staff and slashing millions in costs, Kier still seems to be retaining the confidence of its clients.

In a trading update to shareholders today, the Kier board said that its massive corporate belt-tightening exercise was not spooking customers and it was continuing to win work.

In fact, as we have previously reported, Kier managed to sign a deal a day in 2019, roughly speaking, picking up 256 construction contracts during the year's 253 working week days.

Office closures and outsourcing have continued apace at Kier since launching its strategy review in 2018. New chief executive Andrew Davies joined in April 2019 and soon announced that Kier was selling its house-building business, quitting property development and exiting Environmental Services and Facilities Management.

By the end of June 2020 Kier will have reduced headcount by about 1,200 people and cut overheads by at least £60m. The board is now looking at how it can make more savings next, it said today.

Still no news on the sale of Kier Living, the housebuilding business, however – other than that it remains ‘in progress’. And options for Kier Property are still being evaluated.

Chief executive Andrew Davies said: "The work to re-shape the group continues through the careful execution of our strategic priorities and efforts to significantly reduce the group's cost base.  The group is performing in line with our expectations and we continue to win work from our customers."

Earlier this month Kier Construction was reinstated to the government’s Prompt Payment Code. Kier Highways, Kier Integrated Services and Kier Infrastucture & Overseas remain suspended because of their record of paying suppliers late.

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