Kier has fallen to a £35.5m loss for the second half of 2018, but said it is in a stronger position after hitting up investors for £250m in a disastrous rights issue that missed its target at the end of last year.
The under-fire construction group made a £35.5m loss in the six months to the end of December, after a profit before tax of £34.3m in the same period in 2017.
Revenue rose just three per cent year on year to £2.06bn while the business managed to slash £58m off its net debt to leave it at £180.5m.
Its average month-end net debt for the period was £430m.
Cashflow sunk to minus £3.2m.
Investors were set to suffer a loss per share of 28.9p, compared to earnings per share of 28.7p in the same period in 2017.
Meanwhile Kier’s dividend shrank to a fifth of its 2017 value, at 4.9p per share.
Why it’s interesting
The struggling outsourcer saw shares fall 9.2 per cent to 439.4p this morning as investors reacted to the lacklustre results.
Yesterday the company revealed its new chief executive will be Andrew Davies as it fights to find its feet amid mounting debts. Davies was appointed boss of failed contractor Carillion before it collapsed in January last year, never getting the chance to take the reigns.
Former Kier boss Haydn Mursell was ousted by investor action spearheaded by 15 per cent shareholder Neil Woodford in January.
Looking to hit a net cash position by the end of June, Kier today revealed it delivered £4m in cost savings across the second half of 2018, though the cost-cutting programme cost £14m to implement.
However, Kier expects to net £20m in savings over the coming financial year.
It also brushed off the loss, pointing to underlying profit of £51.8m.
Kier therefore maintained its underlying expectations for the current financial year, saying it will benefit in the second half.
What Kier said
Executive chairman Philip Cox said: “Our regional building and property development businesses continue to operate well, although we are experiencing some volume pressures in the highways, utilities and housing maintenance markets.
“The group has a significantly strengthened balance sheet following the completion of the rights issue in December 2018. The Board continues to focus on simplifying the group, improving cash flow generation and net debt reduction, and forecasts a net cash position at 30 June 2019.”