Kier Group plans further cost cutting to continue current bounceback
Construction and infrastructure group Kier has kept its axe sharpened as it continues to revive its fortunes through strategic cost cutting initiatives.
Kier, which has Cambridge operations, slashed around 420 jobs in the second half of last year and is in the process of closing its long-established stronghold at Sandy in Bedfordshire and disposing of its Living business. CEO Andrew Davies said there could be no let-up in the battle to return Kier to more robust health.
He said decisive management action had resulted in the operating profit increasing 3.4 per cent to £46.7 million in the six months to December 31. Challenging market conditions impacted group revenue which was down by nine per cent but cost savings of £23m were delivered in the period.
A new senior management team has been in place since February and Davies is determined to carry on in the same vein in terms of restructuring. He said: “I am pleased to report that many of the actions we outlined at the beginning of the year have been executed successfully.
“In particular, the decisive cost actions we have taken are now benefiting the group and have more than compensated for the challenging market conditions we experienced in the period.
“The group has been awarded places on several major frameworks since January 1, following the awards of c.£1.7 billion in the period, and the Government has recently confirmed that the HS2 project will proceed.
“We have a new executive management team in place; we are continuing to embed performance excellence; and our cost reduction programme is expected to deliver benefits of at least £65m by June 30, 2021.
“We expect to reduce the capital invested in our non-core businesses and to progress the sale of Living. The work to re-shape the group continues as we focus on executing our strategic priorities and reducing net debt.”