Kier Group’s new chief executive will look at simplifying the business in the coming months as the construction outsourcer continues battling hundreds of millions of pounds of debt.
Andrew Davies, who was elected boss of collapsed outsourcer Carillion before it went bust in January last year, will seek to reallocate capital and generate more cash to reduce the debt pile. He formally joined Kier this morning after his appointment was unveiled last month.
The review will run until July when the conclusions will be announced, said the company, which builds roads, railway tunnels and houses.
Kier’s net debt at the end of last year was £180.5m, and a torrid year for outsourcers has depressed its share price by nearly 70 per cent in the last 12 months.
Its shares rose 2.9 per cent this morning.
Carillion’s collapse in January 2018 followed by Interserve’s administration last month has piled the pressure on the outsourcing industry, and the Cabinet Office has since been forced to write a new rule book for how it procures public services from the private sector.
Kier has contracts for some of the biggest construction projects in the country including London’s Crossrail, but has been troubled of late, as investors took up just 38 per cent of a rights issue over Christmas.
Former boss Haydn Mursell was then forced out of the firm earlier this year, after a rebellious shareholder group spearheaded by veteran investor Neil Woodford started throwing its weight around.
New boss Davies is a 28-year veteran of defence giant BAE Systems, and former chief of Wates Group from 2014 until 2017.