Kier Group increases debt position after accounting error

Kier Group increases debt position after accounting error

Kier Group increases debt position after accounting error

The company said that during the preparation of its FY19 interim results it identified a number of "adjustments", with £10.3m worth related to hedging activities and £40.2m due to the revised classification of the debt associated with certain development assets held for resale.

Kier Group said yesterday that its net debt stood at £180.5 million at the end of its half-year on December 31.

The average month-end debt position for the six months ended December 31 was also increased to about £430 million from £370 million.

Kier Group has announced that its debt at the end of previous year was higher than previously stated, due to hedging activities and a reclassification of debt associated with assets held for resale.

Kier, which builds and maintains highways, railway tunnels and houses, has said there is growing pessimism among bankers, who have cut their exposure to the industry after the high profile collapse of rival Carillion, affecting a rights issue past year.

Chairman Philip Cox is acting as executive chairman working with finance director Bev Dew and chief operating officer Claudio Veritiero until a new chief executive is appointed.

Kier said it had now reviewed the operational progress and cost recovery programme of the project, as it prepared to hand over the first phase.

Man survives at sea by using jeans as a flotation device
A motivating factor that kept him going was his 10-month-old daughter, who lives with his girlfriend in the Philippines. Images of Murke floating in the water while being rescued have been circulating on the internet.

Despite the rights issue flopping, with just 37.6 per cent of the new shares taken up by existing investors, it was underwritten by Kier's bankers, who stumped up the rest, enabling the firm to shed the majority of its debt pile.

Shares in Kier fell by as much as 18 per cent yesterday before closing 59¾p, or 12 per cent, down at 437½p, valuing the company at about £810 million.

"The group continues to forecast a net cash position at 30 June 2019 and remains focused on reducing its average month-end net debt".

"Whilst the board notes the current political and economic uncertainty in the United Kingdom, and the implications for third party investment, the group remains on course to meet its underlying FY19 expectations, with the full-year results being weighted towards the second-half of the financial year, as expected".

Kier also said it would take a £25mln provision related to its long-running contract to redevelop Broadmoor Hospital after reviewing the operational progress and cost recovery programme of the project, which is almost two years behind schedule.

The company's FY19 interim results will be released on 20 March 2019.

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