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Company shake-up near completion

Kier takes £73m hit over restructuring

Kier workersKier is setting aside £73m in its forthcoming results after restructuring the business.

The company is also allowing for £10m in potential safety fines following the introduction of tougher sentencing guidelines.

Closure of overseas operations is costing £79m while the hits have been offset by income from the sale of Mouchel Consulting last October which raised £39m.

Kier MG was fined £1.5m in December 2016 after a worker’s leg was broken in trench collapse; and Kier Construction was fined £400,000 in March 2017 after a worker fell.

Mouchel Consulting was sold to WSP; the Caribbean and Hong Kong businesses were closed; and the half-share of the Biogen renewable energy joint venture was sold in April this year.

Kier said that all this the reorganisation was now nearing completion and trading was in line with expectations, with good organic growth and improved margins.

In a pre-close statement, Kier said: “Since the acquisition of Mouchel in June 2015, the group has undertaken a programme of portfolio simplification allowing it to focus on, and grow, its market leading positions in regional building, infrastructure services and housing.

“This portfolio simplification programme is nearing conclusion and, taking into account the other non-underlying items, will generate cash for the Group to enable it to focus on the future growth of its core operations”

Kier said full-year underlying profit was forecast to be in-line with expectations with construction expected to deliver a 2% margin following a strong regional building performance.

It had also generated net cash of £69m, the “significant” majority of which has been, or will be, invested in its property and residential divisions.

It said it was well-placed for 2018, with growing order books of approximately £9bn.

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