Company warns it might not be until next year before deal for Kier Living is done

Kier has admitted it might not be until next year before the firm finally gets rid of its up-for-sale housing business.

The division, called Kier Living, was put on the block last June with analysts hoping for news on a sale by Christmas.

andrew davies

Chief executive Andrew Davies (pictured) took the decision last summer to sell the 拢350m-plus turnover business in order to eat into the firm鈥檚 debt pile.

But announcing its interim results for the six months to December this morning, Kier said it had now classified the business, which employs around 550 people and operates from five regions with bases including Leeds, Solihull and Marlow in Buckinghamshire, as discontinued and added: 鈥淭his business is expected to be disposed of within the next 12 months. There is a new management team in place and the sales process is progressing.鈥�

Kier said the housing business made a 拢4m profit in the six months, down from 拢9m last time, but this was wiped out by 拢59.5m of exceptional items.

The sale is key to Davies鈥� hopes of getting its debt pile down. The firm said average month-end net debt for the period was 拢395m, down 拢27m from the figure posted in its 2019 full year accounts.

Kier said it had racked up a further 拢71.1m of exceptional items during the period which included nearly 拢17m of redundancy costs which has seen 1,200 people leave the business since Davies, who was appointed last April, announced the results of a strategic review two months later. It added that it expected a further 50 staff to go by the end of June.

It said had begun the process to move out of its historic home at Tempsford Hall at Sandy in Bedfordshire and added that it has now left its London headquarters at Foley Street.

It added that it has spent 拢18m on the review and a further 拢7.4m on preparing the businesses it wants rid of for sale. These also include its property, FM and environmental services arms which between them saw revenue slip 15% to 拢233m.

The firm is now focussing on construction, which includes its regional building and housing maintenance businesses, and infrastructure, which includes its highways, rail and utilities businesses.

Revenue at construction, its largest division, slipped 7% to 拢844m with operating profit down 21% to 拢28.8m before exceptional items. And revenue at infrastructure also fell, down 10% to 拢783m with operating profit before exceptional down a third to 拢27.6m.

Group revenue was down 8% to 拢1.8bn with pre-tax losses narrowing from 拢45.3m to 拢41.2m.

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