Construction News

Fri May 29 2020

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Kier still losing money

5 Mar Kier Group continues to lose money but its cost-cutting programme is making an impact.

Chief executive Andrew Davies
Chief executive Andrew Davies

In the six months to 31st December 2019 Kier made a pre-tax loss of £41.2m, which is only marginally better than the £45.3m first-half loss of the previous year.

Revenue was down 9% for the period to £1,866m (2018: £2,053m).

Central overheads have been slashed from £35m in the six months to December 2018 to £14m in these latest results.

Excluding exceptional items, operating profit was up 11% to £46.7m (2018: £41.9m), although about half of this increase was due to accountancy standards changing.

During the back end of 2019, the headcount has reduced by around 420 and the office at Foley Street in London was shut. The process of closing headquarters at Tempsford Hall in Bedfordshire is now under way.

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Since the cost-cutting began two year ago, Kier has now shed 1,200 jobs and further 50 will be gone by the end of this financial year in June. These reductions in headcount will result in cost savings of at least £65m by June 2021, the company said.

However, the restructuring cost £48.8m in this latest reporting period, including £16.8m in redundancies and £18.1m in fees.

Andrew Davies, who took over as chief executive in April 2019, has made wholesale changes to the executive leadership. Between July and December 2019 Kier got a new chairman and chief financial officer, new group managing directors for the construction and highways divisions, new directors for HR, IT, commercial and procurement, and a new group financial controller.

Meanwhile, still no firm news on Kier Living, which was put up for sale last year, except that a sale is in progress.

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