Kier (KIE) remained in the red in the first half of the 2020 financial year as statutory earnings were weighed down by £71m in exceptional charges. These included £49m in restructuring costs as the group trimmed headcount and implemented its turnaround plan. On an adjusted basis, pre-tax profit was flat at £30.7m.
Amid the wider slowdown last year, adjusted operating profit from Kier’s construction activities dropped more than a fifth to £28.8m. In infrastructure services, the highways business continued to suffer from volume pressures and a shift away from maintenance to lower-margin capital projects. With the margin squeezed by 1.1 percentage points to 3.5 per cent, infrastructure adjusted operating profit plunged by almost a third to £27.6m.
The planned disposal of its housebuilding business, Kier Living, would help address net debt, but a sale has yet to go through. Excluding £188m in lease liabilities, net debt jumped 45 per cent since the 2019 year-end to £242m, although average month-end net debt was £27m less at £395m.
Broker Liberum forecasts adjusted pre-tax profit of £76.8m and EPS of 37.6p in 2020, rising to £80.1m and 38.9p in 2021.
KIER (KIE) | |||||
ORD PRICE: | 121p | MARKET VALUE: | £196m | ||
TOUCH: | 121-122p | 12-MONTH HIGH: | 532p | LOW: | 58p |
DIVIDEND YIELD: | nil | PE RATIO: | na | ||
NET ASSET VALUE: | 239p* | NET DEBT: | 108%** |
Half-year to 31 Dec | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) | |
2018*** | 2.04 | -45.3 | -38.4 | 4.90 | |
2019 | 1.87 | -41.2 | -22.1 | nil | |
% change | -8 | - | - | - | |
Ex Div: | na | ||||
Payment: | na | ||||
*Includes intangible assets of £742m, or 459p a share | |||||
**Includes lease liabilities of £176m | |||||
***Restated |