19th Sep 2019 09:00
(Alliance News) - Kier Group PLC on Thursday reported a "disappointing" financial performance after a tough year, while it has also announced the departure of its chair.
For the year to June, Kier's revenue dipped 0.4% to GBP4.49 billion, but it has posted a pretax loss of GBP245 million after a profit of GBP106 million the year before.
On an adjusted basis, the construction company's pretax profit slumped 40% to GBP98 million.
Profit has been hit by GBP341 million of charges, mainly on preparing businesses for sale, restructuring costs, and "significant" loss-making contracts.
Kier, as already announced, has decided not to pay a final dividend, meaning the total for the year is 4.9 pence, well below the 69.0p paid a year prior. It has already confirmed it will not be paying any dividends for the year ending June 2020.
"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," said Chief Executive Andrew Davies.
"We have a strong order book, reflecting the strength of the underlying business, the quality of our people and the group's capabilities."
Kier's order book stands at GBP9.4 billion, down 4.1% from a year before.
Difficulties in the financial year included a poorly-received rights issue in December, in which only 38% of shareholders took up the offer. Not long after, in January, former CEO Haydn Mursell departed.
The dividend at the halfway stage was slashed by 79% to just 4.9p from 23.0p year-on-year, after Kier sank to a GBP35.5 million pretax loss after a GBP34.3 million profit due to provisions made on a project at Broadmoor hospital and an environmental waste contract.
A profit warning then followed in June, amid a strategic review by the company. Later in June, Kier put its housebuilding and property businesses up for sale as it looked to bolster its balance sheet.
"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 financial 2020 and to restore Kier to robust financial health," said CEO Davies on Thursday.
In a separate announcement, Kier also said Chair Philip Cox will depart once a successor has been found. He became chair in August 2017.
"He has overseen the recent appointment of a new management team and has decided that it would now be appropriate for the company to appoint a new chair to work with the board to deliver the strategic actions announced on June 17," said Kier.
Kier shares were 1.6% lower on Thursday morning at 130p each. They have lost 87% in the past 12 months.
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