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Kier commits to £375M debt reduction

kier

Kier will focus heavily on reducing its debt, the company has revealed following the release of its annual report.

After the collapse of Carillion and Interserve’s shares having earlier this month plummeted to their lowest level in 30 years, Kier said that it recognised that net debt was now an increasingly vital area of focus for stakeholders in the industry.

Kier has said that it expects its average monthly net debt to reduce from its £410M peak in the summer to roughly £390M in the current first half period to December.

The company’s average net debt for 2018 stands at £375M, up £55M from 2017.

Kier chief executive Haydn Mursell said: “We increased profit by 10%, delivering full-year underlying operating profit of £160m in line with our expectations and market consensus.

“We also maintained our market leading positions in the infrastructure services and buildings markets, and our top-three position in the affordable housing and maintenance market.

“With greater investor attention on debt following the demise of Carillion, our net debt position remains under focus.”

News of Kier outlining its emphasis on debt reduction in its annual report came in the same week that the firm agreed to sell its stake in Australian road maintenance business KHSA to Australian infrastructure specialists Downer Group for £24M.

KHSA had previously been a subsidiary of Mouchel, which Kier bought out in 2015. The firm made £7M in profit last year and has total assets of £52M.

The deal is expected to generate £15M of profit for Kier, who hope the deal will help towards reducing its net debt.

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