14th Jun 2019 09:15
(Alliance News) - Kier Group PLC is preparing the sale of its housebuilding business in a deal that could be worth up to GBP150 million, the Times reported on Friday.
The move to prop up its finances comes as two trade credit insurers withdrew cover insuring Kier's suppliers from any potential losses, the Times said. Trade credit insurers pay a company's suppliers when it stops paying bills.
https://www.thetimes.co.uk/edition/business/troubled-kier-to-sell-off-assets-rthmphkrg
Kier shares were 15% lower on Friday at a price of 173.16 pence each. The stock is down 57% so far this year and 83% over the past 12 months.
Earlier this month, Kier said adjusted operating profit for financial 2019 will be lower than previously expected due to mounting volume pressures on three of its divisions continued. These are its Highways, Utilities and Housing Maintenance businesses.
In addition, despite double-digit order book growth, the Buildings business unit's revenue growth for 2019 will be lower than previously forecast, the company said.
This will impact the Kier's financial results for the year ending June 30, with revenue expected "broadly in line" with financial 2018 and underlying operating profit around GBP25 million lower than previously guided. A year ago, Kier's revenue amounted to GBP4.5 billion while adjusted profit from operations was GBP160 million.
Furthermore, Kier said at the time it is likely to report a net debt position as at June 30 that "would have an adverse impact on 2019 average month-end net debt position".
Kier added that the costs of its restructuring programme, Future Proofing Kier, is now expected to be GBP15 million higher than originally estimated.
Related Shares:
Kier