Kier said operating profits for 2019 will come in £25m lower than previous expectations while the costs of its ongoing “Future Proofing Kier” restructuring programme have increased by £15m.
A trading statement to the City said: “The Group continues to experience volume pressures within its Highways, Utilities and Housing Maintenance businesses.
“In addition, whilst continuing to perform well with double digit growth in its orderbook during FY2019, the Buildings business’ revenue growth for FY2019 will be lower than previously forecast.
“As a result, Kier now expects that FY2019 revenue will be broadly in line with the Group’s reported revenue for the 2018 financial year and currently expects that the Group’s underlying operating profit for FY2019 will be c. £25 million lower than previous expectations and that the Group is likely to report a net debt position as at 30 June 2019, which would have an adverse impact on its FY2019 average month-end net debt position.”
Kier last revised up debt levels in March after warning it will take a £25m hit on the delayed Broadmoor hospital job.
Cost increases in the restructuring programme come as the review has been accelerated by new chief executive Andrew Davies.
Results of the company-wide strategic review aimed at simplifying the business and focusing on profitable areas will be announced at the end of July.
The Enquirer revealed last month that the review has unearthed tensions between Kier commercial and project teams.
Kier’s share price fell more than 35% on the news in early trading.
