Things seem to be going from bad to worse for Kier (KIE) as the shares fell by nearly a fifth after the construction group revised its net debt position for the year to December 2018, from £130m to £180m. The announcement comes less than two months after chief executive Haydn Mursell was asked to resign following a rights issue that saw just 38 per cent taken up by shareholders.
The latest revelation came as the company was preparing its half-year results for the six months to December 2018 when it identified a number of adjustments relating to its hedging activities. It has also revised the classification of £40.2m of debt associated with certain development assets held for resale on its balance sheet. Following the reclassification, this will now be included in the group’s net debt position, although for the year to June 2019 Kier still expects to forecast a net cash position.
In a separate development, the first phase of the Broadmoor Hospital redevelopment project is expected to be handed over shortly, and the remaining work will then start. A process has been agreed with the client to reach agreement over Kier’s entitlement to additional costs associated with the project’s delay, and has concluded that a £25m non-underlying provision will be included in the half-year results due for release on 20 March.
