Business has been up for sale since summer 2019
The up-for-sale housing arm of Kier has crashed to a pre-tax loss of more than 拢89m, the firm鈥檚 latest accounts have revealed.
Kier, which is due to give a trading update next week, has been trying to get rid of its Kier Living business since summer 2019 when then new chief executive Andrew Davies decided it was no longer core.
In its latest annual report, published last October, Kier valued the housing business at 拢110m, a fall of just over 拢51m on the previous estimate which it said it was taking as an impairment. It said it had revised the value down 鈥渄ue to the uncertainties in the market resulting from covid-19鈥�.
The month before, Davies said he expected the sale, which has been going on since June 2019, to be wrapped up in the next six to 12 months.
Kier Living鈥檚 latest accounts for the year to June 2020, signed off just before Christmas and filed at Companies House last week, show that pre-tax losses widened to 拢89.4m from 拢6.5m last time.
It said the bulk of the loss was caused by having to write off a 拢50m loan to another residential business, Kier Caledonia Homes, because the firm did 鈥渘ot have sufficient assets to repay the debt鈥�.
But it also took a 拢22.3m hit on exiting fixed-price building contracts while it said the cost of dealing with the covid-19 pandemic had racked up a 拢4.4m bill.
Turnover during the period fell from 拢118m to 拢55m, with the firm adding that revenue had been hit by the pandemic and subsequent first lockdown announced by prime minister Boris Johnson on 23 March.
It said it completed 1,053 homes in the year, a fall of 38% on the 12 months before.
And the number of people it employed during the year dropped from 606 to 554. It said it had cut a further 111 jobs after the year-end, spending 拢2.2m on restructuring costs.
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