This morning Kier declared the firm’s recovery plan, following the £110m sale of its housing business last week, was close to being completed with the planned equity raise.

Andrew Davies, chief executive, said: “We have achieved many of the milestones required to improve cash generation and reduce net debt. 

“The process of simplifying the group has been substantially completed through the exit of non-core businesses and the adoption of an appropriate cost base.

“These actions will have delivered annualised cost savings of at least £115m by the end of FY21.”

Announcing a £9m pre-tax profit from a £41m loss in the first half to the end of December, he said an operating profit of £29m with strong cash inflows had allowed the contractor to reduce supplier payment days from 38 to 34.

Revenues fell 13% to £1.6bn, primarily due to Kier’s exit from low margin and loss-making contracts and businesses, as well as Covid 19 working restrictions.

Davies said the cost-cutting and headcount reduction programme was now complete and the planned equity raising would complete the Kier turnaround, allowing it to address month-end net debt unchanged at £436m.

“The proposed equity raise, which we plan to launch in the coming weeks, subject to market conditions, together with the continued support of our lending group, will further strengthen the group’s balance sheet and will facilitate investment in the business to help drive sustainable, profitable organic growth.

“The second half of the year has started well seeing a continuation of the positive trends of the first half and we are confident of achieving further progress this year in line with our expectations.” 

Across the divisions, operating profit remained consistent despite reduced revenue from Covid delays as Kier focused on strengthening margins.