Kier revives profits after two-year turnaround
Construction firm Kier has returned to profitability following several years of losses. The revival is partly due to Chief Executive Andrew Davies’ ability to complete several strategic tasks set in April 2019. These included strengthening the balance sheets and narrowing the company’s focus.
Profit and revenue
In the latest calculations from the 30th June 2021, Kier Group made a pre-tax profit of £5.6mn compared to a £225mn loss the year before. The revenue for 2021 reached £3.329mn, a slight drop from last year’s £3.476mn. The reduction in turnover was due to several factors such as exiting non-core low margin and loss-making contracts, completion of the M20, M23, and M6 motorway upgrade projects, and the Covid-19 pandemic.
In the medium term, the board has since set a new target to revive revenue back up to between £4.0bn and £4.5bn. Speaking about the milestone, Andrew Davies said: “We have completed the strategic actions set out in 2019 to simplify and focus the group, improve cash generation and strengthen our balance sheet. The successful capital raise, the recent sale of Kier Living, and the extension of the group's revolving credit facility provides Kier with the financial and operational flexibility to continue to pursue its strategic objectives within its chosen markets and will allow it to further enhance and capitalise on its position as a strategic partner to its customers.
He added that “current trading is in line with our expectations, and despite inflationary pressures and the impact of increased national insurance contributions, our outlook for the current year remains unchanged. We are now focused on delivering our medium-term value creation plan by leveraging our attractive market positions, delivering our high-quality order book, and fostering our long-term customer relationships and sector expertise."