Kier Group (KIE)

Sector:

Construction and Building Materials

Index:

FTSE 250

131.60p
   
  • Change Today:
    -1.40p
  • 52 Week High: 143.00
  • 52 Week Low: 67.30
  • Currency: UK Pounds
  • Shares Issued: 446.45m
  • Volume: 931,051
  • Market Cap: £587.53m
  • RiskGrade: 260

Kier to cut 1,200 jobs as it looks to make annual savings of ?55m

By Michele Maatouk

Date: Monday 17 Jun 2019

LONDON (ShareCast) - (Sharecast News) - Construction group Kier will cut about 1,200 jobs as it looks to reduce debt and deliver annual cost savings of around £55m from 2021.
As part of the new strategy announced on Monday, Kier will simplify its portfolio by selling or substantially exiting non-core activities.This includes Kier Living and the company's property, facilities management and environment services segments.

Kier will instead focus on its regional building, infrastructure, utilities and highways businesses, whose performance is underpinned by long-term contracts and positions on frameworks for government and regulated clients.

"Together these businesses are expected to deliver long-term, sustainable revenues and margins and, with a renewed focus on their inherently cash generative characteristics, will be the core activities of the group in the future," Kier said.

The company said it was suspending its dividend payments for 2019 and 2020 and that net debt at 30 June 2019 will be higher than current market expectations, while its average month-end net debt will rise to between £420m and £450m.

Chief executive Andrew Davies said: "As previously announced, I have been leading a strategic review which has resulted in the actions being announced today.

"These actions are focused on resetting the operational structure of Kier, simplifying the portfolio, and emphasising cash generation in order to structurally reduce debt. By making these changes, we will reinforce the foundations from which our core activities can flourish in the future, to the benefit of all of our stakeholders."

Following the completion of the programme, Kier expects to deliver annual sustainable cost savings of around £55m from 2021. The costs of delivering the programme are expected to be approximately £28m in 2019 and £28m in 2020.

"The reduced cost base will provide clear foundations for Kier's improved competitiveness and future growth; it will also enable investment in the group's processes and delivery capabilities," it said.

At 0925 BST, the shares were down 10.2% at 117.50p.

Russ Mould, investment director at AJ Bell, said Kier's decision to ditch its dividend should not be a shock given the company's precarious financial position.

"New CEO Andrew Davies is not stopping at just the dividend. He is taking drastic action in an attempt to avoid Kier suffering a similar fate to its doomed peer Carillion. Jobs are being slashed, the housebuilding unit is being sold and the company is prioritising cash flow.

"These all seem like sensible steps but delivering on this plan will not be easy. The turnaround programme delivered by Leo Quinn at rival group Balfour Beatty offers Kier something of a template."

House broker Liberum said the company's residential business could be worth £315m, excluding £60m of old land. The property division could be worth £254m. Facilities management and environmental could be worth a total of around £10m, it said.

The broker cut its price target on the buy-rated stock to 150p from 320p.

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Note 1: Prices and trades are provided by Digital Look Corporate Solutions and are delayed by at least 15 minutes.

Note 2: RiskGrade figures are provided by RiskMetrics.

 

Kier Group Market Data

Currency UK Pounds
Share Price 131.60p
Change Today -1.40p
% Change -1.05 %
52 Week High 143.00
52 Week Low 67.30
Volume 931,051
Shares Issued 446.45m
Market Cap £587.53m
RiskGrade 260

Kier Group Star Ratings

Compare performance with the sector and the market.
more star ratings
Key: vs Market vs Sector
Value
21.62% above the market average21.62% above the market average21.62% above the market average21.62% above the market average21.62% above the market average
40.00% above the sector average40.00% above the sector average40.00% above the sector average40.00% above the sector average40.00% above the sector average
Price Trend
90.29% above the market average90.29% above the market average90.29% above the market average90.29% above the market average90.29% above the market average
90.24% above the sector average90.24% above the sector average90.24% above the sector average90.24% above the sector average90.24% above the sector average
Income
29.04% above the market average29.04% above the market average29.04% above the market average29.04% above the market average29.04% above the market average
Sector averageSector averageSector averageSector averageSector average
Growth
20.14% above the market average20.14% above the market average20.14% above the market average20.14% above the market average20.14% above the market average
7.32% above the sector average7.32% above the sector average7.32% above the sector average7.32% above the sector average7.32% above the sector average

What The Brokers Say

Strong Buy 4
Buy 1
Neutral 1
Sell 0
Strong Sell 0
Total 6
strong_buy
Broker recommendations should not be taken as investment advice, and are provided by the authorised brokers listed on this page.

Kier Group Dividends

  Latest Previous
  Interim Interim
Ex-Div 18-Apr-24 28-Mar-19
Paid 31-May-24 17-May-19
Amount 1.67p 4.90p

Trades for 28-Mar-2024

Time Volume / Share Price
16:41 30,000 @ 131.60p
16:37 10,000 @ 132.00p
16:35 142,325 @ 131.60p
16:35 375 @ 131.60p
16:35 1,483 @ 131.60p

Kier Group Key Personnel

CEO Andrew Davies
CFO Simon Kesterton
Chair Matthew Lester

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