This article is from the source 'guardian' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.
You can find the current article at its original source at https://www.theguardian.com/business/2019/jun/03/kier-constrution-firm-shares-tumble-after-profit-warning
The article has changed 9 times. There is an RSS feed of changes available.
| Version 1 | Version 2 |
|---|---|
| Kier shares plunge more than 40% after profit warning | Kier shares plunge more than 40% after profit warning |
| (32 minutes later) | |
| The construction and services group Kier has issued a profit warning, sending its shares crashing by more than 40% to their lowest level in 20 years. | The construction and services group Kier has issued a profit warning, sending its shares crashing by more than 40% to their lowest level in 20 years. |
| The new guidance means that Kier’s underlying full-year profits will be substantially below earlier forecasts, at about £129m rather than £169m. Shares in the FTSE 250 company plummeted by more than 42% to 158.6p in early trading – the lowest since February 1999 – and are now down 38% at 171.2p. | |
| This is less than half the 409p a share investors paid in December, when Kier launched a £264m emergency fundraising in an attempt to avoid the same fate as Carillion, the construction and services company that slumped into insolvency in January 2018. | This is less than half the 409p a share investors paid in December, when Kier launched a £264m emergency fundraising in an attempt to avoid the same fate as Carillion, the construction and services company that slumped into insolvency in January 2018. |
| Kier investors shunned the cash call, with only 38% of the shares taken up, and financial institutions had to step in. | Kier investors shunned the cash call, with only 38% of the shares taken up, and financial institutions had to step in. |
| The group, which works on large infrastructure projects such as HS2 and London’s beleaguered Crossrail, is also the UK’s leading regional builder of schools and hospitals. It said revenue growth at its regional buildings business would be lower than forecast. | The group, which works on large infrastructure projects such as HS2 and London’s beleaguered Crossrail, is also the UK’s leading regional builder of schools and hospitals. It said revenue growth at its regional buildings business would be lower than forecast. |
| In March, when Kier reported a first-half pretax loss, it flagged up problems in its highways, utilities and housing maintenance divisions, and these continue. It has been hit by Highways England cutting back maintenance spending and delays in telecoms companies’ fibre rollout. | |
| As a result, the company said underlying operating profit for the year to 30 June would be £25m lower than City forecasts of £169m. | As a result, the company said underlying operating profit for the year to 30 June would be £25m lower than City forecasts of £169m. |
| In addition, Kier is taking a £15m hit from higher restructuring costs this year. The company’s chief executive, Andrew Davies, who joined from Wates in March and had been lined up to take over at Carillion before it collapsed, is ramping up a programme to streamline Kier. The group also warned on its debt. | |
| The group will announce the outcome of a strategic review on 30 July, with speculation about the sale of its maintenance work division. | The group will announce the outcome of a strategic review on 30 July, with speculation about the sale of its maintenance work division. |
| John Moore, a senior investment manager at Brewin Dolphin, said: “Kier is in a dark place. At the turn of the year the business set out its financials, trading performance and future plans as part of its unsuccessful rights issue, only to now say that this information was largely wrong. It has broken trust with investors, which does not bode well. | John Moore, a senior investment manager at Brewin Dolphin, said: “Kier is in a dark place. At the turn of the year the business set out its financials, trading performance and future plans as part of its unsuccessful rights issue, only to now say that this information was largely wrong. It has broken trust with investors, which does not bode well. |
| “Comparisons will be made with the likes of Carillion and, indeed, Kier has lots of complex long-term contracts and individual subsidiaries, which makes for an opaque situation where clarity and stability are desired. Where it goes from here is hard to say.” | “Comparisons will be made with the likes of Carillion and, indeed, Kier has lots of complex long-term contracts and individual subsidiaries, which makes for an opaque situation where clarity and stability are desired. Where it goes from here is hard to say.” |
| Kier | Kier |
| Profit warnings | Profit warnings |
| Construction industry | Construction industry |
| Stock markets | Stock markets |
| HS2 | HS2 |
| Crossrail | Crossrail |
| news | news |
| Share on Facebook | Share on Facebook |
| Share on Twitter | Share on Twitter |
| Share via Email | Share via Email |
| Share on LinkedIn | Share on LinkedIn |
| Share on Pinterest | Share on Pinterest |
| Share on WhatsApp | Share on WhatsApp |
| Share on Messenger | Share on Messenger |
| Reuse this content | Reuse this content |