KIER Group has suffered a £35.5 million drop in profits before tax for the six-month period to 31 December 2018, its latest financial results show.
The infrastructure, building, development and housing group reported an operating loss of £20.9 million on underlying revenue of £2.2 billion (H1 FY18: £2.1 billion). Underlying profit from operations was down 15% to £51.8 million (H1 FY18: £60.6 million), after £10 million net costs from the Future Proofing Kier restructuring programme.
Kier Construction Scotland is said to have maintained turnover stability at approximately £150 million, with future growth targeted at £200 million by 2020.
Commenting on the results, Brian McQuade, managing director of Kier Construction Scotland said, “Kier is delivering a number of important construction projects throughout Scotland and it plays a vital role supporting the economy. Our unique expertise in the heritage sector continues to flourish as we recently completed the £6.8 million restoration and development of the 200-year-old Aberdeen Music Hall, breathing new life into this stunning building for future generations to enjoy.
“We also transformed two historic buildings within the University of Edinburgh’s campus, carrying out a £14 million refurbishment of the Grade A Listed Edinburgh College of Art and the £7.7 million refurbishment of the Grade B-listed building, Murchison House.”
He continued, “Throughout the country, Kier Construction Scotland continues to deliver a robust and steady pipeline of work. Education and healthcare remain key sectors and Kier is currently on site at the Royal Cornhill Hospital in Aberdeen, carrying out a £6 million refurbishment programme. Work has also started on building Alness Academy, a new £32 million state-of-the-art school on behalf of hub North Scotland for the Highland Council, and on the £9.7 million redevelopment of the six-storey high, Category B listed Wolfson Building for the University of Strathclyde.
“At Glasgow Airport, Kier is delivering a £3.5 million extension to the West Pier and work is underway on the £66m refurbishment of one of Scotland’s national treasures, the Burrell Museum.”
Philip Cox, Kier Group executive chairman, added, “Our regional building and property development businesses continue to operate well, although we are experiencing some volume pressures in the highways, utilities and housing maintenance markets. The Group has a significantly strengthened balance sheet following the completion of the rights issue in December 2018.
“The Board continues to focus on simplifying the Group, improving cash flow generation and net debt reduction, and forecasts a net cash position at 30 June 2019. Whilst the Board notes the current political and economic uncertainty in the UK, and the implications for third party investment, the Group is maintaining its underlying FY19 expectations, with the full-year results being weighted towards the second-half of the financial year, as expected.”