5th Mar 2020 11:38
(Alliance News) - Construction firm Kier Group PLC reported on Thursday a decline in interim revenue due to "challenging" market conditions.
Shares were 18% higher in London on Thursday at a price of 120.20 pence each. They were over 500p a year ago, however.
Kier, which used to be a member of the FTSE 250, posted revenue of GBP1.82 billion for the six months to December, 8.0% lower than the year before.
Revenue fell due to tough market conditions in both Construction and Infrastructure Services, while several other long-term investment programmes ended in the half. The order book was GBP7.9 billion at the end of December, the same as June's end.
Kier's pretax loss narrowed to GBP41.2 million from GBP45.3 million, with pretax profit before exceptional items 1.7% higher at GBP30.7 million.
The company is not paying a dividend for the half, having returned 4.9 pence per share the year before. Kier did not pay a final dividend for its year ended June 2019, and confirmed at the time there would be no dividends for financial 2020.
Kier's previous financial year was a troublesome one, hit in part by "significant" loss-making contracts. In December 2018, a rights issue was only taken up by 38% of shareholders, with former Chief Executive Haydn Mursell leaving shortly after.
"I am pleased to report many of the actions we outlined at the beginning of the year have been executed successfully. In particular, the decisive cost actions we have taken are now benefiting the group and have more than compensated for the challenging market conditions we experienced in the period," said CEO Andrew Davies.
Kier is currently trying to sell its Kier Living business, which is deemed not compatible with "working capital objectives". The sale process is "progressing", Kier said Thursday.
"We have a new executive management team in place; we are continuing to embed Performance Excellence; and our cost reduction programme is expected to deliver benefits of at least GBP65 million by June 2021," said CEO Davies.
"We expect to reduce the capital invested in our non-core businesses and to progress the sale of Living. The work to re-shape the group continues, as we focus on executing our strategic priorities and reducing net debt."
By George Collard; [email protected]
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