Kier has revised its end-of-year financial statement for 2018, declaring an additional £50M of debt that went unnoticed due to an “accounting error”.
The revised figures raised the net debt as of the end of December 2018 from the previously stated £130M to £180.5M. A large portion of the additional debt comes from Kier taking a £25M hit on a delayed hospital project.
In their statement, the company wrote that “[Kier] has revised its net debt position as at 31 December 2018 to £180.5M (from c.£130M) and, accordingly, has re-calculated its average month-end net debt for the six months ended 31 December 2018 as being c.£430M (from c.£370M).”
The statement also announced that a one-off “non-underlying provision” of £25M was going to be included in the next financial statement to cover “additional costs associated with the project’s delay” for Kier’s on-going work on the new Broadmoor Hospital.
Shares plummeted 12% following the announcement of the additional debt, which will come as a blow to the company who is hard at work trying cut its massive debt pile.
In January, New Civil Engineer reported that Kier was close to finalising a deal to sell its housing maintenance division in a deal to net the company £30M.
The sale was part of a plan announced in the company’s annual report to reduce net debt and also saw the sale of a stake in Australian road maintenance business KHSA to Australian infrastructure specialists Downer Group for £24M.
Despite extensive recovery plans, it has been a rough road for the company, with short selling of its shares last year, which led to previous Kier chief executive Haydn Mursell stepping down, as well as a £250M rights issue wiping out 40% of the company’s value in November last year.
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