Kier made a £41.2m pre-tax loss in the second half of 2019, as the cost of restructuring the business continued to drag on profit.
The company also reported a 9% drop in revenue to £1.9bn in the six months to 31 December 2019 amid “challenging” trading conditions.
While pre-tax profit before exceptional items rose slightly to £30.7m for the period, up from £30.2m, a total of £71.1m in charges pushed the business into a statutory pre-tax loss. That figure included £48.8m in restructuring costs, of which £16.8m was in respect of employee exit costs. Kier aims to reduce its headcount by around 1,200 people and deliver cost savings of £60m from 2021.
Revenue in both the company’s infrastructure and construction businesses were down by 10% and 7% respectively, while average month-end net debt was £395m – a reduction of £27m on the 2019 financial year.
Kier’s order book as of 31 December 2019 stood at £7.9bn, with the group winning orders of £1.7bn in the period, including being appointed to all 20 lots of the four-year £8bn Procure Partnerships Framework, as well as the £30bn Construction Works and Associated Services Framework for the Crown Commercial Service.
Andrew Davies, chief executive, said: “I am pleased to report that many of the actions we outlined at the beginning of the year have been executed successfully. In particular, the decisive cost actions we have taken are now benefiting the Group and have more than compensated for the challenging market conditions we experienced in the period. These actions resulted in an increase of 3.4% in operating profit before exceptionals and the impact of [changes to accounting standard] IFRS 16.”
