More cuts due as Kier sets aside £7.6m for restructuring

Grant Prior 11 years ago

Restructuring at Kier will cost another £7.6m as the contracting giant continues to close regional offices and dispose of “non-core” assets.

Kier has already spent £4.4m on restructuring as its regional network has been slimmed down and its scaffolding business disposed of.

But there is more to come in the next few months as chief executive Paul Sheffield confirmed another round of cuts as Kier revealed its interim results for the six months to December 31 2012.

Pre-tax profits were down to £27m from £34m last time as turnover fell to £976m from £1,046m.

Sheffield said: “As we are exposed to today’s difficult environment, particularly in UK building, we are taking steps to restructure the business to reflect the scale of future opportunities.

“This restructuring will continue through the second half of the financial year.”

The firm reported an exceptional charge of £4.4m during the period to pay for restructuring with a total of £12m expected for the full financial year.

Cash generation has been a problem during the six months compounded by the spread of project bank accounts on public jobs and the tighter payment terms on framework agreements.

Construction revenue dropped to £627m from £720m as margins fell to 2.1% from 2.5% which Kier said was “a good result in today’s shrinking and increasingly competitive market.”

Public sector schemes account for half of Kier’s construction work with education schemes accounting for 29% of wins.

Sheffield said: “The Construction division is well established in its key markets; however margins and working capital continue to tighten in the current competitive trading environment.

“Accordingly we have undertaken a comprehensive review of the division, particularly the UK building activities, to restructure the business in light of the forecast market conditions and to ensure that we drive efficiency throughout our operations to hold margins close to current levels.

“This will involve the closure or disposal of non-core activities and restructuring our network of offices.

“The process will continue in the second half of the year however it will not compromise our commitment to a regional focus or the delivery of our services to customers, but will position us well to respond to any market recovery.”




Latest news

Equans suffers £146m loss and quits new build housing

Losses hit £99m on housing association new build work
4 hours ago

Job cuts at modular house builder TopHat

Offsite housing specialist acts in response to "challenging market"
5 hours ago

Graham wins £85m Milton Keynes Lakes Estate revamp

Enabling works start ahead of building 200 council homes
4 hours ago

Go-ahead for London’s largest estate £1bn rebuild

Spring start for first job at Stratford's Carpenter Estate scheme
18 hours ago

Costain trials electric vans on major civils sites

Green vans meet "tight budgetary requirements" in pilot scheme
21 hours ago

Green light for major mixed-use scheme in Ealing

Scheme will provide 10,915 sq ft of industrial workspace alongside 140 new homes
4 hours ago

Taylor Wimpey sees tender inflation fall to 1%

House builder retenders site work as build costs slide
1 day ago

Careys back in profit after £47m turnaround

Contracting division back in profit ahead of three-year growth plan
2 days ago

Rye Demolition goes into administration

Another specialist contractor goes under
1 day ago

Historic breakthrough for HS2’s longest tunnel drive

TBM Florence ends her 10 mile journey under the Chilterns
2 days ago

Volumetric builder Tide seals deal to start London tower

32-storey North Acton tower will consist of 462 co-living units
1 day ago

Costain moves HQ to London’s Can of Ham

Contractor makes return to London from Maidenhead base
2 days ago

Former Keltbray highways MD joins McAlpine

Vip Gandhi takes lead role at Transport division
2 days ago

Willmott Dixon exits stage left from Essex theatre contract

Contract re-tendering shines spotlight on growing schism between contractors and clients
2 days ago

Purpose build student schemes to surge again

Unite assembles record £1.3bn pipeline as fall in HMO supply boosts PBSA sector
2 days ago

Bidding starts for £1.4bn Midlands Rail Hub Alliance

Alliance will deliver upgrades to rail lines and stations around Birmingham and nearby towns
2 days ago

Brickability sounds warning over materials demand

Distributor sees lower sales lasting for longer before house building recovers
2 days ago

English Cities Fund raises extra £200m for work pipeline

Muse, Homes England, L&G partnership to double in size
2 days ago

Go-ahead for 64 homes at former Glasgow Coliseum theatre

Robertson-owned developer Urban Union to build four housing blocks at site
2 days ago

Competition probe launched into 8 major house builders

Cartel watchdog says volume house builders may have exchanged competitively sensitive information
3 days ago

Cement-free concrete firm falls into administration

DB Group also owned Pudlo waterproofing products
3 days ago

Everton Stadium now structurally complete

Laing O'Rourke lifts final concrete terrace section into place
3 days ago

HS2 launches third London Northolt tunnel TBM

1,700 tonne machine begins 3.4mile dig under the capital
3 days ago

Willmott Dixon set for Manchester science park job

Contractor understood to be in final stages of talks to land £75m Greenheys building
6 days ago

Transport jobs get £4.7bn of cancelled HS2 cash

Government details funding for North and Midlands from 2025
3 days ago

Stewart Milne went down owing supply chain £153m

So far 1,375 firms have come forward with unpaid bills
7 days ago

Didcot disaster investigation enters its ninth year

Still no answers for families of quartet killed in demolition collapse
6 days ago

Mount Anvil wins £275m Westminster estate renewal

First phase of Church Street area regeneration will deliver 400 new homes and a library
7 days ago

Trio of A47 road upgrades to go-ahead as legal challenge fails

20-month delay adds tens of millions to dualling costs
7 days ago

Skanska and Morgan Sindall win £277m duo of Cambridge jobs

Railpen awards £200m Botanic Place and £77m Devonshire Gardens office jobs
1 week ago

Contractor services