Kier in shock debt restatement

Aaron Morby 5 years ago
Share

Kier has revised up estimated net debt following an accounting error and warned it will take a £25m hit on its long-delayed Broadmoor hospital project.

Kier says it will soon handover phase one of the Broadmoor Hospital redevelopment
Kier says it will soon handover phase one of the Broadmoor Hospital redevelopment

In a surprise statement this morning Kier revealed it had revised up its average net debt for the six months to December by £50m after revisiting how it booked certain assets.

Group debt has been corrected from the previous reported level in its January half-year trading update, which also announced the immediate departure of chief executive Haydn Mursell.

The revision has raised net debt as of 31 December 2018 from a previously stated £130m to £180.5m.

This has raised average month-end net debt over the period from £370m to £430m.

Kier said it had revised debt after identifying a number of adjustments totalling £10.3m relating to the group’s hedging activities.

It also revised the classification of the debt associated with certain developments assets held for resale, coming to £40.2m.

In the stock market statement this morning, ahead of reporting half-year results next week, Kier also warned it would take a £25m hit on its long-running contract to redevelop Broadmoor hospital.

Shares fell by 12% in early stock market trading to £4.37 after the revelation this morning.

As reported by the Enquirer, the main part of the project is nearly two years late.

Kier said it had now reviewed the operational progress and cost recovery programme of the  project, as it prepared to hand over the first phase.

Remaining work on the project, which accounts for less than 10% of its value, would commence shortly, after this handover in April.

“The group has recently agreed a process with the client which is designed to reach agreement with respect to the group’s entitlement to the additional costs associated with the project’s delay,” said the firm.

The £25m hit will be recorded in Kier’s  2019 full year results.

It added: “While the board notes the current political and economic uncertainty in the UK, and the implications for third party investment, the group remains on course to meet its underlying 2019 expectations, with the full-year results being weighted towards the second-half of the financial year, as expected.” 

“The group continues to forecast a net cash position at 30 June 2019 and remains focused on reducing its average month-end net debt.”

 

Latest news

McAlpine pulls out of £55m Carlisle Citadels project

University of Cumbria starts hunt for replacement contractor
3 days ago

Strabag UK suffers further big trading loss

Austrian contractor is gearing up for major presence in the UK market
2 days ago

Durham Uni picks UPP for £130m student scheme

Firm will deliver 1,000 self-catered bed spaces
2 days ago

Architects now upbeat after 10-months of work gloom

Larger practices see rising workloads in next three months
2 days ago

Motorist dies after collision with road paver

Police Scotland investigating fatal crash
3 days ago

McLaren Living appoints HG Construction for £69m scheme

Build to Rent scheme will transform former vacant car park site in Leeds city centre
3 days ago

Squibb liquidator probes £2m of “missing” plant

Machinery, cars and scrap metal have disappeared at demolition specialist
3 days ago

Galliford Try to re-enter affordable homes market

Contractor sets out new five-year plan to build margin to 4%
3 days ago

Former Sellar chief to lead civils contractor Kilnbridge

Owen Dannatt joins as new CEO as founder Dermot McDermott becomes Chairman
3 days ago

Hunt starts for nuclear fusion plant construction partner

Fusion energy plant to be built at West Burton coal power station site.
3 days ago

National Grid raises £7bn for big infrastructure upgrade

Rights issue to fund a major round of capital investment in energy infrastructure
3 days ago

Grenfell police probe to last at least until end of 2025

19 companies and 58 individuals could eventually face charges
3 days ago

Mace confirmed on £100m London office retrofit

Work underway on Helical's 100 New Bridge Street job near Ludgate Circus
4 days ago

Wylfa chosen for next big nuclear power station build

Government names Anglesey site for a large-scale gigawatt nuclear power plant.
4 days ago

Bowmer & Kirkland trading profit halves

Contractor buys HVAC specialist Adcock despite challenging market
4 days ago

Piling specialist Van Elle plans further job cuts

Piling specialist plans further cost savings in face of lower demand
4 days ago

Civils contractor A Catlow files administration notice

High voltage cable specialist lodges court notice
4 days ago

Green light for ARC Oxford lab campus

Work to start later this year on £40m Ascent building job
4 days ago

Stonehenge tunnel hit by another legal delay

Court upholds latest appeal against £1.7bn scheme by campaigners
5 days ago

Plans go in for huge Olympic Park construction hub

Bow Goods Yard could deliver 3.5m tonnes of materials a year to sites across London
5 days ago

40% affordable homes target for Labour’s new towns

Labour pledges to select new town sites by end of first year
5 days ago

Plan for £100m Liverpool Baltic station

Construction work could begin next year
5 days ago

Surgo Construction went down owing £4.5m

Biggest creditor is Bellway Homes after dispute on housing job
5 days ago

Vistry seals £157m West London housing deal

Around 575 homes to be built at Merrick Place scheme in Ealing
5 days ago

Streamlined Watkin Jones returns to profit in first half

Multi-room specialist sees secured work pipeline hit £1.4bn
5 days ago

Bellway hires ex-brickie as group construction chief

James Griffin to oversee move to the Future Homes Standard and timber frame.
5 days ago

Persimmon under fire for delays to £10m relief road

West Suffolk Council serves Breach of Condition Notices after timetable slips again
5 days ago

BAM wins £33m Kent secondary school job

Replacement Swanley academy to be built at live school site
5 days ago

Aluminium cladding specialist collapses

Melton Mowbray-based firm worked for several main contractors
6 days ago

Brickwork contractor Lee Marley returns to profit

Affordable and rental homes demand lifts brickwork contractor
6 days ago

Contractor services