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Kier to cut 1,200 jobs as it seeks to cut costs Kier to cut 1,200 jobs as it seeks to cut costs
(about 1 hour later)
Troubled construction and services firm Kier has said it will cut 1,200 jobs to help make cost savings of £55m a year from 2021.Troubled construction and services firm Kier has said it will cut 1,200 jobs to help make cost savings of £55m a year from 2021.
The company will sell its homebuilding business, Kier Living, and will shut or sell other interests, including its recycling and rubbish processing units.The company will sell its homebuilding business, Kier Living, and will shut or sell other interests, including its recycling and rubbish processing units.
Kier said it would focus on businesses including construction and road maintenance.Kier said it would focus on businesses including construction and road maintenance.
Shares in the company have fallen by more than 85% in the past year.Shares in the company have fallen by more than 85% in the past year.
The shares fell a further 9% in early trading on Monday, to about 119p.
"These actions are focused on resetting the operational structure of Kier, simplifying the portfolio, and emphasising cash generation in order to structurally reduce debt," said chief executive Andrew Davies."These actions are focused on resetting the operational structure of Kier, simplifying the portfolio, and emphasising cash generation in order to structurally reduce debt," said chief executive Andrew Davies.
"By making these changes, we will reinforce the foundations from which our core activities can flourish in the future, to the benefit of all of our stakeholders.""By making these changes, we will reinforce the foundations from which our core activities can flourish in the future, to the benefit of all of our stakeholders."
Profit warningProfit warning
The company's woes are having ramifications beyond the construction world. The share price fall has affected its largest investor, Woodford Investment Management, which has had to suspend its flagship fund after some of its investments lost value and investors withdrew funds.The company's woes are having ramifications beyond the construction world. The share price fall has affected its largest investor, Woodford Investment Management, which has had to suspend its flagship fund after some of its investments lost value and investors withdrew funds.
Two weeks ago, Kier shares tumbled more than 22% after it issued a profit warning.Two weeks ago, Kier shares tumbled more than 22% after it issued a profit warning.
At the time it said underlying profit would be about £25m below previous expectation. It blamed higher costs and problems at units in the road, utilities and housing maintenance businesses.At the time it said underlying profit would be about £25m below previous expectation. It blamed higher costs and problems at units in the road, utilities and housing maintenance businesses.
Last year, Kier launched a reorganisation aimed at cutting costs and selling non-essential businesses.Last year, Kier launched a reorganisation aimed at cutting costs and selling non-essential businesses.