Kier reports pre-tax loss

22 September 2016

A pre-tax loss of £15 million (€17.47 million) in the first six months of 2016 has been reported by UK contractor Kier, although it said its results were in line with expectations, with underlying profit from operations up 44%.

Its revenue of £4.2 billion (€4.89 billion) was up 26%, with a like-for-like revenue figure showing a rise of 8%.

Kier said its underlying profit from operations of £150 million (€174.80 million), included a full year’s contribution from Mouchel, which it acquired in 2015, an increased share of post-tax results of joint ventures in its property division, and margin recovery supported by cost efficiencies

It added that the integration of Mouchel had now been completed and the simplification of its portfolio was well advanced.

It reported statutory profit from operations of £12 million (€13.99 million) – compared to a figure of £61 million (€71.11 million) in the same period of 2015 – including £116 million (€135.21 million) non-underlying costs primarily relating to the portfolio simplification. These included £50 million (€58.28 million) relating to the Mouchel integration and restructuring, £35 million (€40.79 million) relating to the impact of commodity prices on two waste collection contracts, and a £23 million (€26.80 million) provision for the winding down of its Caribbean operations.

Order book

The group said it was performing well in growing market sectors with an order book of £8.7 billion (€10.14 billion) providing long-term visibility. It added that it was confident of achieving its strategic goal of double-digit profit growth on average each year to 2020.

Haydn Mursell, chief executive, said, “I am pleased to report a good set of results reflecting the evolution of the Group during the year following the completion of the integration of Mouchel.

“The group continues to perform well in growing market sectors including infrastructure, housing and regional building, providing a breadth of capabilities to our clients.”

He said, “For the first time, 50% of group profit now comes from our services division where essential day-to-day services are provided to clients, and we have long-term visibility of our future pipeline of work.

Mursell said that the group remained focused on growing the business through improving operational efficiencies and investing in new technology to support its operations.

“We believe that our range of complementary businesses underpins the resilience of our operating model and the strength of our order book.

“Having completed the integration of Mouchel, we are well progressed with the simplification of our portfolio of businesses, and are focused on capitalising on the growth opportunities available to the group.”

He added, “We remain confident of achieving our goal of double-digit profit growth on average each year to 2020.”

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