Kier Group shares soar as it outperforms pandemic expectations
Shares in outsourcing group Kier jumped more than 11 per cent today, after the group surpassed analyst expectations in a set of full-year results dented by the coronavirus pandemic.
Its adjusted profit before tax fell 72.5 per cent to £16.9m, compared to £61.4m in 2019 after costs related to restructuring and Covid-19.
Costs directly related to the impact of Covid-19 came to £45m, knocking revenue down 15 per cent to £3.5bn.
Liberum analysts said the group’s profit was ahead of their estimates, giving the company some room to handle their ongoing debt commitments.
Kier has previously taken some drastic measures to lower its debt burden, including suspending its dividend for the last two years, as it seeks to distance itself from the fates of collapsed rivals Interserve and Carillion.
At the end of June Kier’s order book was reported at £7.9bn, while net debt was higher than expected at £310.3m.
“The effects of Covid-19 have reduced the amount of work we were able to undertake in the key final quarter of the financial year and costs have increased,” said chief executive Andrew Davies.
“Whilst the group anticipates that the effects of Covid-19 will continue, the strategic actions being implemented… are designed to ensure Kier is well placed to benefit from the proposed substantial increase in UK infrastructure investment. We have a strong order book, and the current year has started in line with our expectations.”
Prime Minister Boris Johnson has pledged to double down on infrastructure spending in the UK, ramping up plans to increase construction work in a bid to reinvigorate the economy.