The Kier Group today confirmed it was pushing ahead with a new share issue as it announced it has returned to half-year profits.

The Manchester-based construction giants, fresh from selling its housebuilding arm Kier Living for £110m, has released details of its plans to raise in the region of £200m via the equity raise.

Latest results show debt standing at £436m but in the six months to December 2020, pre-tax profits rose to £9m, up from a loss of £41m for the corresponding time period in 2019.

[emaillocker id=”71749″]

Chief executive Andrew Davies said: “I am pleased to report that the execution of the strategic imperatives outlined in June 2019 has resulted in significant improvements in both our financial results and free cash flow for the re-shaped Group. With the announcement of the sale of Kier Living on 16 April, we have achieved many of the milestones required to improve cash generation and reduce net debt. 

“The process of simplifying the Group has been substantially completed through the exit of non-core businesses and the adoption of an appropriate cost base. These actions will have delivered annualised cost savings of at least £115m by the end of FY21.

“The proposed equity raise, which we plan to launch in the coming weeks, subject to market conditions, together with the continued support of our lending group, will further strengthen the Group’s balance sheet by reducing net debt and will facilitate investment in the business to help drive sustainable, profitable organic growth and the achievement of our medium term financial targets.

“The second half of the year has started well seeing a continuation of the positive trends of the first half and we are confident of achieving further progress this year in line with our expectations.”  

Kier has also managed to pay the government £29m in tax deferred because of Covid while the order book increased to £8bn (as of December 30, 2021).

While six-month turnover dropped to £1.6bn from £1.8bn (in 2019) the company’s stated medium-term target is annual revenues of £4bn-4.5bn.

The Kier chief also outlined how he expected that increase in revenue to happen: “With the Group focused on UK Government and regulated industries, it is well-placed to benefit from the announced and committed increased spend in these areas. 

“We have secured places on the Frameworks through which much of the increased spend is expected to come and our nationwide coverage combined with project management expertise gives us confidence in the outlook for Kier over the next few years.”