Kier鈥檚 annual revenue was largely unchanged at 拢4.49bn (2018: 拢4.51bn) but charges of 拢341m, relating to preparing businesses for sale, restructuring and loss-making contracts, devastated the bottom line result.
Operating profit was down 33% to 拢124m (2018: 拢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 拢55m a year by 2021.
Kier鈥檚 order book at 30th June 2019 was 拢9.4bn (2018: 拢9.8bn), with 拢1.1bn of new awards won in the second half of the year.聽 Excluding HS2, the order book was 拢7.9bn (2018: 拢8.5bn).
Net debt at 30th June 2019 was 拢167m (2018: 拢186m) and average month-end net debt was 拢422m (2018: 拢375m).
Kier鈥檚 Buildings business increased its revenue by 6% last year to 拢1,883m (2018: 拢1,778m). Profit before exceptionals increased by 13% to 拢62m (2018: 拢55m), with operating margins increasing to 3.3% (2018: 3.1%).
Infrastructure Services (highways, utilities and infrastructure) suffered a 4% dip in revenue to 拢1,671m (2018: 拢1,733m). Profit before exceptionals decreased by 41% to 拢56m (2018: 拢95m) and operating margins decreased to 3.4% (2018: 5.5%).
One-off costs include 拢56.4m of restructuring costs and a 拢29.3m charge in respect of the 2017 acquisition of McNicholas.
There was also a 拢43.5m provision relating to the Broadmoor Hospital Redevelopment and a 拢6.4m charge in relation to the Mersey Gateway project.
Costs relating to the preparation of businesses for sale and closure came to 拢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.聽 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."
Got a story? Email news@theconstructionindex.co.uk
