Construction group moots sale of Mouchel Consulting and axes its Caribbean business
Kier has announced 拢82m of fresh writedowns including the increased cost of integrating consultant Mouchel and axing its Caribbean business.
In a trading statement this morning, the construction group revealed the cost of integrating Mouchel - a deal it closed for 拢265m last sunmer - had increased by 拢29m to a total cost of 拢44m.
The construction group said it had incurred higher integration costs for Mouchel in order to make greater annual cost savings, on top of the 拢10m annual savings it had already forecast, starting with an additional 拢4m saving last year and 拢5m to June 2017.
Kier also revealed plans to review or offload a number of its businesses. The firm will consider a potential sale of the management consulting arm of Mouchel, Mouchel Consulting, and it plans to quit the Caribbean region, due to 鈥渃hallenging鈥� trading conditions, at a one-off cost of 拢18m.
Meanwhile, the firm announced a 拢35m writedown against the value of two long-term contracts in its environmental services business, which it attributed to cashflow issues caused by the low oil price.
Kier said aside from these writedowns the firm鈥檚 underlying trading performance remained in line with expectations.
Kier said last month鈥檚 EU referendum result had had 鈥渘o impact鈥� on the firm so far and the board believes the firm has the 鈥渂readth of activities and strong order books [to] provide both visibility and resilience鈥� in the face of any Brexit volatility.
Kier reported that its net debt stood at 拢140m at the end of June 鈥� lower than forecast 鈥� and included the cash expenditure of 拢44m on the Mouchel integration and 拢25m on new systems and upgrades.
The firm said it recently raised 拢82m of new finance on the German debt markets.
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