Money: Struggling Kier to cut 1,200 jobs and sell non-core businesses - PressFrom - United Kingdom
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MoneyStruggling Kier to cut 1,200 jobs and sell non-core businesses

06:20  18 june  2019
06:20  18 june  2019 Source:   news.sky.com

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Construction and services firm Kier Group is to cut 1 , 200 jobs and non - core businesses as it seeks to turnaround its fortunes. The company, which has been the subject of speculation over its financial health in the wake of the collapse of Carillion, launched a strategic review in April - weeks after chief

Kier Group will sell its housebuilding and property businesses , cut about 1 , 200 jobs and suspend its dividend for at least two years in a “ Selling our non - core businesses allows us to simplify the group, pay down debt, improve our working capital and importantly improve the volatility in our working capital.”

Struggling Kier to cut 1,200 jobs and sell non-core businesses © PA Carillion's demise last year shook confidence in the companies exposed to public sector contracts

Construction and services firm Kier Group is to cut 1,200 jobs and non-core businesses as it seeks to turnaround its fortunes.

The company, which has been the subject of speculation over its financial health in the wake of the collapse of Carillion, launched a strategic review in April - weeks after chief executive Haydn Mursell was effectively ousted by shareholders.

His successor Andrew Davies told investors on Monday that he was taking a number of actions that would concentrate resources on core activities, simplify its portfolio and bring down debt at the same time.

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Troubled construction and services firm Kier has said it will cut 1 , 200 jobs to help make "By making these changes, we will reinforce the foundations from which our core activities can flourish in the Last year, Kier launched a reorganisation aimed at cutting costs and selling non -essential businesses .

" Selling our non - core businesses allows us to simplify the group, pay down debt, improve our working capital and importantly improve the volatility in our Kier said on a call with analysts that the impact of covering the trade credit insurance withdrawal was about 25 million pounds. Kier to sell housing

The review found an insufficient focus on cash generation after years of expanding the company's interests.

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It said Keir would now focus on its regional building, infrastructure, utilities and highways arms - saying their performance was underpinned by long-term contracts and would deliver sustainable revenues and margins.

Keir said it would sell or substantially exit Kier Living along with its property, facilities management and environmental services businesses to allow a renewed focus on cash generation.

It hoped that cutting 1,200 full-time jobs across its businesses would help deliver annual cost savings of £55m from 2021.

Under an accelerated programme of cuts Kier, which employs almost 20,000 workers, said it expected around 650 staff would have already left the business by the end of this month with a further 550 roles going in the next financial year.

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Troubled construction and services firm Kier has said it will cut 1 , 200 jobs to help make "By making these changes, we will reinforce the foundations from which our core activities can flourish in the Last year, Kier launched a reorganisation aimed at cutting costs and selling non -essential businesses .

Introduction: Kier Group cuts 1 , 200 jobs and plans to exit four businesses . Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business . It has been a torrid few years for the inelegantly named construction and support services

Kier's financial woes were partly of its own making in that an accounting error in the spring added £50m to its debt pile.

Struggling Kier to cut 1,200 jobs and sell non-core businesses © Getty Kier's contracts include work on London's Crossrail and repairs for Highways England A capital-raising at the end of last year failed to attract enough investor demand - leaving banks to pick up the tab.

Kier said that media speculation relating to its financial position - which included claims that credit insurers were getting cold feet - had knocked confidence in the company and affected its working capital position.

It said that while its banking facilities were able to absorb the "volatility", net debt at the end of this month would be higher than current market expectations.

The company expected average month-end net debt to come in at £420m-£450m.

It confirmed dividends were suspended for this current financial year and next.

Shares - down more than 65% in the year to date - were 3% up in early deals.

Mr Davies said: "These actions are focused on resetting the operational structure of Kier, simplifying the portfolio, and emphasising cash generation in order to structurally reduce debt.

"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."

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