Kier has announced “significant interest” in its housebuilding business, in a trading update.
The contracting giant revealed its intention to sell off Kier Living in June this year, as part of a major restructuring, which will see Kier focus on core areas of regional building, infrastructure, utilities and highways.
Kier will also exit the property, facilities management and environmental services markets. Around 1,200 jobs are expected to be lost, to deliver annual cost savings of around £55m under chief executive Andrew Davies’s restructuring plan, as the business aims to reduce debt and secure better long-term revenue. As at 30 June 2019, the group’s net debt was £167m.
Kier Living is understood to be up for sale at a price of around £120m.
In its latest update, Kier said trading remained resilient in the group’s infrastructure services and building divisions, but turnover is predicted to be down on 2018 by £100m due to property and land-led transactions not completing by June 2019.
The group reported average payment days to its supply chain partners of 41 for the second half of the 2019 financial year, a reduction from 57 days for the first half of the year.
Kier has also appointed a new CFO, Simon Kesterton, to help lead its transition at the beginning of August. Kesterton joined Kier from RPC Group, taking over from outgoing finance director Bev Dew, who stood down following announcement of Kier’s 2019 results.
