Kier warns of £25m hit to operating profit
Troubled construction company Kier said full year underlying operating profit would be £25m lower than previous expectations with higher net debts and flat revenue.
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The company said it was still experiencing volume pressures in its highways, utilities and housing maintenance businesses, adding that revenue growth at its buildings unit would be lower than forecast.
Shares in the FTSE 250 company nosedived more than 40% in early trading, their lowest level in a decade.
Kier, which had reported debt at the end of 2018 of £180.5m, down from £624m said it was likely to report a net debt position as June 30, which would have an adverse impact on its FY2019 average month-end net debt position.
Net costs from a strategic review of the company were also expected to be £15m than previously forecast.
In a surprise statement three months ago Kier revealed it had revised up its average net debt for the six months to December by £50m.
Group debt was amended from the previous reported level in Kier's January half-year trading update. The revision raised average month-end net debt over the period to £430m from £370m.
In December Kier launched a £264m emergency fundraising as it tried to avoid a collapse similar to that of government contractor Carillion, which went into insolvency in January 2018. Investors snubbed the offer as only 38% of the shares were taken up with financial institutions bridging the gap.
Kier works on projects such as the controversial High Speed 2 rail link and London’s delayed Crossrail as well as schools and hospitals.