Kier Group trading in line as it focuses on strategy

(Sharecast News) - Kier Group said it was trading in line with its expectations in an update on Friday, reporting that since 30 June, it had been awarded around £1bn of new contracts and been appointed to a number of frameworks, including the £30bn 'Construction Works and Associated Services' framework for the Crown Commercial Service.
The London-listed firm, which was holding its annual general meeting, said working capital and net debt were both in line with expectations

It said it was continuing to focus on operational cash generation, with working capital and net debt both in line with the board's expectations as well.

Looking at its strategic priorities, Kier said it remained on course to deliver a headcount reduction of around 1,200 by 30 June 2020, and annual cost savings of at least £55m in the financial year ending 30 June 2021.

The group recently agreed terms to outsource its IT and fleet management activities, and was taking additional steps to reduce its costs, including exiting its offices at Tempsford Hall in Bedfordshire and Foley Street in London, and making a number of changes to the structure of its senior management.

It said it was still progressing the sale of its house building division, Kier Living, and exploring options to further accelerate the release of capital from its property business.

Claudio Veritiero, the company's chief operating officer, was announced to be standing down from the board and leaving the business with immediate effect.

The responsibilities of the chief operating officer would be assumed by the chief executive and the chief financial officer.

Adam Walker, who joined the board on 1 January 2016, had also informed the board of his intention to step down from 31 December.

Justin Atkinson, the senior independent non-executive director, would then assume the role of chair of the risk management and audit committee until a successor to Walker could be appointed.

The board said the process to appoint a new chairman was ongoing.

"We continue to build the foundations for the future of the group through the execution of our strategic priorities," said chief executive Andrew Davies.

"Our core businesses are performing in line with our expectations and we continue to win work from a number of our major clients, whilst significantly reducing the group's overheads and costs."

At 1222 GMT, shares in Kier Group were up 1.3% at 88.79p.