Kier Group issues £multi million profit warning
Kier Group plc, which has offices across the region, has issued a profit warning.
The company said that it continues to experience volume pressures within its Highways, Utilities and Housing Maintenance businesses. In addition, while continuing to perform well with double digit growth in its orderbook during FY2019, the Buildings business' revenue growth for FY2019 will be lower than previously forecast.
Kier now expects that FY2019 revenue will be broadly in line with the Group's reported revenue for the 2018 financial year and currently expects that the Group's underlying operating profit for FY2019 will be c. £25 million lower than previous expectations and that the Group is likely to report a net debt position as at 30 June 2019, which would have an adverse impact on its FY2019 average month-end net debt position.
The net costs associated with its Future Proofing Kier programme for 2019 are now expected to be around £15 million higher than previously forecast. In part, this reflects an acceleration of the programme following the appointment of Andrew Davies as Chief Executive. These net costs are in addition to the £25 million reduction in operating profit identified above. Kier will provide a further update on the FPK programme when it announces the conclusions of the strategic review.
On 15 April 2019, Kier announced that Andrew Davies would lead a strategic review of the Group to consider ways of further simplifying it, the allocation of capital resources across the Group and additional steps to improve cash generation and reduce leverage. Kier confirms that the conclusions of this review will be announced on 30 July 2019.
