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Thu October 21 2021

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Davies delivers Kier turnaround

16 Sep After pre-tax losses totalling £470m in the previous two years, Kier has scraped back into the black.

Kier chief executive Andrew Davies
Kier chief executive Andrew Davies

Kier chief executive Andrew Davies says that the task he set about on taking over in April 2019 have now been achieved, including narrowing the focus and repairing the balance sheet.  

In the year to 30th June 2021 Kier Group made a pre-tax profit of £5.6m (2020: £225m loss) on revenue of £3,329m (2020: £3,476m).

The 4% reduction in turnover was attributed to exiting non-core low margin and loss-making contracts, completion of the M20, M23 and M6 motorway upgrade projects and the Covid-19 pandemic, partially offset by growth in the core business.

The board has set a target to grow revenue back up to £4.0-4.5bn in the medium-term. Kier turnover peaked at £4.5bn in 2018, but that included the house-building division that it has since sold.

The infrastructure division made an operating profit of £41.4m (2020: £9.4m) on revenue of £1,422m (2020: £1,506m).

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The construction division made an operating profit of £40.7m (2020: £52,3m loss) on revenue of £1,769m (2020: £1,835m).

Kier Property made an operating profit of £2.3m (2020: £21.7m loss) on revenue of £134m (2020: £1254m).

The orderbook was £7.7bn at 30th June 2021.

Andrew Davies said: “We have completed the strategic actions set out in 2019 to simplify and focus the group, improve cash generation and strengthen our balance sheet. The successful capital raise, the recent sale of Kier Living, and the extension of the group's revolving credit facility provides Kier with the financial and operational flexibility to continue to pursue its strategic objectives within its chosen markets and will allow it to further enhance and capitalise on its position as a strategic partner to its customers.

“Current trading is in line with our expectations, and despite inflationary pressures and the impact of increased national insurance contributions, our outlook for the current year remains unchanged. We are now focused on delivering our medium term value creation plan by leveraging our attractive market positions, delivering our high-quality order book and fostering our long-term customer relationships and sector expertise."

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