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£50M of new debt revealed in Kier accounting error

Kier

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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Readers' comments (1)

  • Philip Alexander

    Goodness, a £50 million "error". If I'd made that sort of error as a consultant I wouldn't have lasted long. Fancy not "noticing" that you were £50 million short? But hold on, isn't Crossrail about £2 BILLION short due to a bit of a brain fade? Seems to be catching and no one's accountable any more so I guess Kier's Finance Director is safe in his job.

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