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04/07/2016
Kier Restructuring Plans To Result In £53m Hit
Kier has revealed it will take a £53 million cost-hit as it continues with its Group restructuring plans.
The company is preparing to sell its Mouchel Consulting business as part of the process, which is expected to make an £8m profit this year and has net book assets of £25m as of 30 June.
The Group will also close down its Caribbean construction business due to a "challenging trading environment" for a cost of £18m.
In addition, the Group's Environmental Services division is continuing to be affected by global oil prices.
In a trading update today, 04 July, Kier said: "The financial performance of the Environmental Services business continues to be affected by the low oil price and, consequently, the price of recyclates, despite stable operational performance at contract level. As a result, a provision of £35m will be taken in FY16, which provides for all future cash outflows on two environmental contracts of eight and ten years' duration, respectively."
Concerning its future outlook, the company added: "Current trading is positive and the Group will continue its disciplined approach to winning work and risk management. In summary, and as shown following the successful integration of Mouchel, the Group has a track record of driving efficiencies through the business as well as managing risk effectively. The Group's excellent cash performance, combined with our new fixed-rate facilities, provide a robust platform for the year ahead."
(LM/MH)
The company is preparing to sell its Mouchel Consulting business as part of the process, which is expected to make an £8m profit this year and has net book assets of £25m as of 30 June.
The Group will also close down its Caribbean construction business due to a "challenging trading environment" for a cost of £18m.
In addition, the Group's Environmental Services division is continuing to be affected by global oil prices.
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In a trading update today, 04 July, Kier said: "The financial performance of the Environmental Services business continues to be affected by the low oil price and, consequently, the price of recyclates, despite stable operational performance at contract level. As a result, a provision of £35m will be taken in FY16, which provides for all future cash outflows on two environmental contracts of eight and ten years' duration, respectively."
Concerning its future outlook, the company added: "Current trading is positive and the Group will continue its disciplined approach to winning work and risk management. In summary, and as shown following the successful integration of Mouchel, the Group has a track record of driving efficiencies through the business as well as managing risk effectively. The Group's excellent cash performance, combined with our new fixed-rate facilities, provide a robust platform for the year ahead."
(LM/MH)
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