Contractor Kier will restructure its construction division after profits and revenues fell in 2012, its trading update said today.
Construction revenues dropped from £720M in the last six months of 2011 to £627M for the same period in 2012. Profits also dropped from £17.8M to £13.5M over the same period. The firm’s construction division profit margin also dropped from 2.5% in the last six months of 2011 down to 2.1% in 2012.
The poor results have led the firm to carry out a restructure, according to the update.
“We have undertaken a comprehensive review of the [construction] division, particularly the UK building activities, to restructure the business in light of the forecast market conditions and to ensure that we drive efficiency throughout our operations to hold margins close to current levels,” said Kier chief executive Paul Sheffield.
Across the group revenue in the final six months of 2012 dropped £70M down to £976M from £1.046bn in 2011. The firm’s profit also fell from £34M in 2011 down to £27M for the same period in 2012.
The contractor faced a one-off charge of £4.4M to reflect the restructuring and order books have achieved 100% and 96% respectively of its targeted revenue for 30 June 2013.