Kier has slipped to a £245m pre-tax loss in 2019 on revenue of £4.5bn, as the company battles to restructure, shed jobs and sell its housing arm to regain its footing.
The contractor, which made a £106m pre-tax loss the year before, was hit with £341m of exceptional charges during 2019. That figure included £172m in costs related to disposing of its Kier Living, environmental services and facilities management businesses, £56m in restructuring charges, and £50m in exceptional contract losses.
Under chief executive Andrew Davies, who joined the business in April this year, Kier is being simplified into four businesses: regional building, highways, utilities, and infrastructure. It is set to shed 650 jobs this year, with a total headcount reduction of 1,200 by 2020.
The group’s order book at 30 June was £9.4bn, down slightly from £9.8bn in 2018. Excluding HS2, which is currently undergoing an independent review, its order book in 2019 was £7.9bn, down from £8.5bn in 2018.
Meanwhile, net debt fell to £167m, down from £186m in 2018. However, average month-end net debt increased to £422m, up from £375m in 2018.
Kier said its regional building business performed well during 2019, winning new projects totalling £1.9bn. Its highways division meanwhile experienced “overall volume pressures” and a change in the mix of work from maintenance to lower margin capital expenditure projects. Its utilities business also experienced volume pressure mainly as a result of delays in broadband installations in the telecommunications sector, and a reduction in housing completions in Kier Living and delays to transactions in its property business affected its results in its developments and housing arm.
Commenting on the results, 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."
