Kier targets £50m disposals to cut £375m debt

Aaron Morby 3 months ago
Share

Kier expects to raise up to £50m from non-core business disposals as part of a plan to cut its debt mountain of £375m.

Kier chief targets net cash position by 2021

Alongside £20m annual savings from its Future Proofing Kier streamlining programme, the group aims to reduce debt to £250m and be in a net cash position by 2021.

The debt reduction plan was highlighted as Kier reported pre-tax profit for the year ending June 2018 of  £137m from stable revenue of £4.5bn.

Its robust results caught out short-selling hedge funds that had been circling Kier after making a killing on Carillion. Shares rose 7% in early trading in the City.

Haydn Mursell, chief executive, said:  “We have launched the Future Proofing Kier programme which will streamline the business thereby enabling us to deliver a more efficient service to clients, respond to changes in our markets and capitalise on growth opportunities, while, importantly, also accelerating the reduction of the group’s net debt position.

“Our strong market-leading positions, our record £10.2bn construction and services order books, and our £3.5bn property development and residential pipelines, will see the group deliver on its Vision 2020 targets.

“In addition, the Future Proofing Kier programme positions the group well for an improvement in operating margins and higher cash generation, culminating in a net cash position for FY21.”

He said that Kier would stabilise its investment in its property and residential divisions to help deliver targets.

Across the group divisions, construction revenue remained stable at £2bn with an underlying operating profit increase of 5% to £42m.

Construction experienced strong revenue growth during the fourth quarter following a decline earlier in the year as a result of slower site starts and adverse weather.

Construction margins were also stable at 2%.

Service division revenue rose 10% to £1.85bn, helped by the acquisition of McNicholas Construction.

Kier said services operating margins remained robust at 5% helping to generate an underlying operating profit of £93m.

Property revenue increased 20% to £218m, generating an underlying operating profit rise of a third to £34m, while the residential business delivered a 14% uptick in operating profit to £26m on stable revenue of £374m.

 

Latest news

Balfour Beatty delivers 2-3% construction margin goal

Leo Quinn hits phase two target of Build to Last turnaround plan
2 days ago

Firms admit price-fixing of concrete drainage products

Precast firms took part in cartel for seven years
2 days ago

£300m Edgbaston mixed-use scheme advances

Phase one office project edges closer at New Garden Square regen scheme
2 days ago

All JCB staff get £1000 Christmas bonus

Over 7,000 staff earn biggest Christmas bonus in a decade
2 days ago

Robertson appoints Morgan Sindall director

Scott Wilson is now Robertson's business development director
2 days ago

Beeston leisure centre out to bid

Bidding starts on cinema project in £30m shops and 130 homes scheme
2 days ago

Scape MD to head Perfect Circle consortium

Victoria Bambini to lead AECOM, Pick Everard and Gleeds joint venture
2 days ago

EastEnders set rebuild soars £27m over budget

NAO slams BBC for planning failures and procurement delays
3 days ago

Spurs stadium delays continue into New Year

Man Utd match will be played at Wembley next month as contractors work through Christmas
3 days ago

Speedy buys construction training business for £9m

Plant hirer buys Glasgow-based Geason in construction training push
3 days ago

Summer start for £25m Carlisle flood defence plan

Flood defence plan to be revealed three years after storm Desmond hit
3 days ago

Amco wins Dunbar railway station upgrade

Work to start next summer on new platform and footbridge
3 days ago

Architects win post-Brexit talent deal

Designers win concessions but construction still in skills turmoil
3 days ago

Boost your online presence – join the Enquirer Directory

New site for suppliers and buyers showcases products, services and latest stories
8 months ago

Essex contractor collapses after posting record results

Bolt and Heeks Ltd in administratron with 55 job losses
4 days ago

Science park starts contractor hunt for £12m office scheme

Construction work up for grabs on trio of buildings near Liverpool
4 days ago

Hitachi to pull out of £14bn Anglesey nuclear power plant

Hitachi plans for Anglesey nuclear power plant now in doubt
4 days ago

M&E specialist Ameon replaces Imtech on Graham site

Subcontractor steps in to keep project on track
4 days ago

Marshalls to buy rival concrete brick maker

Marshalls to buy Edenhall for up to £17m
4 days ago

Argent gets go-ahead for major Tottenham Hale revamp

Contractor hunt to start soon with construction set to start next summer
4 days ago

Drylining boss banned for tax dodging

Insolvency Service investigators uncover huge CIS and VAT payment discrepancies
4 days ago

£2bn Elephant & Castle shopping centre scheme final go-ahead

Demolition to start after London mayor nods through vast scheme
5 days ago

Modular building specialist goes into administration

Timber accommodation pod maker Carbon Dynamic runs out of cash on major contract
5 days ago

Structural engineer crushed under scaffold tubes

Housing giant and scaffold contractor fined a total of £180,000
5 days ago

Consultant MHBC merges with Cumming

City of London based firm now part of global giant
5 days ago

Crossrail delayed again as costs rise by another £2bn

Mayor attacks previous management team who insisted project was "on time and on budget"
5 days ago

Top housing association hires Lendlease resi chief

Richard Cook will lead Clarion Group's ambitious development plans
5 days ago

UK’s tallest Premier Inn plan in Docklands

Premier Inn books in at 30-storey mixed resi and hotel scheme
5 days ago

Kier wins £45m Cambridge schools campus phase one

Northstowe education campus includes a new 1,800 pupil secondary
5 days ago

Ian Lawson to advise McLaren on growth plans

Former Severfield and Kier boss becomes consultant at expanding contractor
5 days ago

Contractor services