Kier hit by £73m of writedowns

Kier has said it expects to make a total writedown of £73m ahead of its full-year results at the end of June.

In a trading statement the construction group said the writedowns included a £56m loss associated with the closure of the firm’s Caribbean business and a £23m loss on the closure of its Hong Kong business.

Kier added that an agreement of a final account with a client on a challenging project from its Caribbean business had been reached and the job was expected to complete within the next three months, while it expected the settlement of a final account associated with its Hong Kong business. 

The firm added that it also incurred a writedown of £9m from the sale of its joint venture interest in its renewable energy business Biogen in April, a £6m loss from establishing its Cross Keys Homes joint venture in March which releases cash fro re-investment in new opportunities across the group.

Kier reported that it also expects an increase in fines for health and safety incidents following the introduction of new sentencing guidelines and has made a £10m provision. A further loss of £11m is expected from the early end of its 10-year contract waste and recycling collection contract with four East Sussex councils and the effects of the a reduced recyclate income.

However, the firm said it made profit of £39m from the sale of Mouchel Consulting in October last year and £69m of net cash had been generated and was to be invested in the form’s property and residential divisions

Kier said its full-year underlying profit was forecast to be in line with expectations and net debt was anticipated to be £150m which is at the lower end of market forecasts.

The firm reported that it had an order book of £9bn and 85% of its revenue secured for the next financial year.