Kier’s annual revenue was largely unchanged at £4.49bn (2018: £4.51bn) but charges of £341m, relating to preparing businesses for sale, restructuring and loss-making contracts, devastated the bottom line result.
Operating profit was down 33% to £124m (2018: £187m).
A new chief executive, Andrew Davies, joined in April, inheriting a strategy review that began the previous year. In June he announced that Kier was selling its house-building business, Kier Living, quitting property development and exiting Environmental Services and Facilities Management. These developments are all now under way, at considerable expense, but are expected to save £55m a year by 2021.
Kier’s order book at 30th June 2019 was £9.4bn (2018: £9.8bn), with £1.1bn of new awards won in the second half of the year. Excluding HS2, the order book was £7.9bn (2018: £8.5bn).
Net debt at 30th June 2019 was £167m (2018: £186m) and average month-end net debt was £422m (2018: £375m).
Kier’s Buildings business increased its revenue by 6% last year to £1,883m (2018: £1,778m). Profit before exceptionals increased by 13% to £62m (2018: £55m), with operating margins increasing to 3.3% (2018: 3.1%).
Infrastructure Services (highways, utilities and infrastructure) suffered a 4% dip in revenue to £1,671m (2018: £1,733m). Profit before exceptionals decreased by 41% to £56m (2018: £95m) and operating margins decreased to 3.4% (2018: 5.5%).
One-off costs include £56.4m of restructuring costs and a £29.3m charge in respect of the 2017 acquisition of McNicholas.
There was also a £43.5m provision relating to the Broadmoor Hospital Redevelopment and a £6.4m charge in relation to the Mersey Gateway project.
Costs relating to the preparation of businesses for sale and closure came to £172m.
Commenting on the results Andrew Davies said: "Kier experienced a difficult year, resulting in a disappointing financial performance. 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. We have a strong order book, reflecting the strength of the underlying business, the quality of our people and the group's capabilities. The sale of Kier Living is progressing well and we are exploring options to accelerate the release of capital from our 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."