KIER Group has reported a £225.3 million pre-tax loss for the year ended 30 June 2020. Last year the group recorded a loss of £229.5 million.
Revenue fell from £3.9 to £3.4 billion but the forward order book is a ‘strong’ £7.9 billion.
The business said the results reflect nine months of ‘good strategic progress’ followed by three months of Covid-19-related impact.
Chief executive Andrew Davies said, “This financial year has been a difficult one for the group. The progress made in the first nine months, despite challenging market conditions, reflected the successful execution of many elements of our strategic plan, as we began to experience the benefits of the decisive cost reduction actions taken.
“The effects of Covid-19 adversely impacted the group’s performance in the final three months of the financial year, as the business adapted to working under revised site operating procedures.”
Davies added that, as explained last year, Kier needs ‘substantial restructuring, but has great potential’.
“Whilst first half volumes were lower, this was anticipated as significant contracts concluded and frameworks transitioned,” he explained. “The decisive cost saving measures allowed profits to improve despite these reductions in revenues. As a result, the group was trading in line with expectations in the period up to 31 March 2020. However the effects of Covid-19 has reduced the amount of work we were able to undertake in the key final quarter of the financial year and costs have increased.
“Revenues therefore decreased by 15% and adjusted operating profits have reduced to £41 million. The working capital implications of the reduced volumes in the final quarter as compared to 2019 resulted in the group needing to agree a number of relaxations to its agreements with its lenders.
“During the year we have recognised substantial one-off costs, including the costs associated with the reorganisation of our southern regional building business stream and associated with the cost reduction programmes, our engagement with the group’s lenders, as well as the fees associated with the execution of our strategy.”
Davies said the new senior management team continues to focus on driving a range of ‘strategic and operational actions’ throughout the group and, whilst it is anticipated that the effects of Covid-19 will continue, the actions being implemented are designed to ensure Kier is well placed to benefit from the ‘proposed substantial increase’ in UK infrastructure investment.”
