Mark Whitehead 06 June 2019

Councils exposed following Kier profit warning

Local authorities are heavily exposed to struggling construction giant Kier which faced a huge fall in its share price this week, according to the latest figures.

Market analysts Tussell say the firm is named on 80 local authority contracts signed since 2015, with a total lifetime value of nearly £600m.

The biggest is a £210m contract with Shropshire started last April to repair the county's highways, estimated to be worth £21m a year.

Wiltshire County Council has contracts with the company worth £63.9m, while the third biggest customer is Durham County Council with £50m of business.

Kier announced on Monday that its underlying full-year profits would be far below earlier forecasts, leading to its shares plummeting by 41% to their lowest level since 1999.

The FTSE 250 company, which employs 20,000 people, builds and maintains infrastructure and buildings for the public and private sector such as roads, rail, schools, hospitals, student housing, prisons, offices and homes.

Large infrastructure projects include HS2 and London’s delayed Crossrail.

In December Kier launched a £264m emergency fundraising in a bid to avoid the same fate as Carillion, the construction and services company that collapsed in January 2018 forcing many local authorities to find alternative suppliers.

Tussell's founder Gus Tugendhat said: ‘Kier’s financial woes have been apparent for many months now.

'Kier differs to other struggling suppliers in that its contract portfolio is much more heavily weighted towards the wider public sector, particularly local government and higher education bodies.

'Whatever happens with Kier, it is essential that central government is sharing the lessons it has learned in managing risk in its supply chain with colleagues across the wider public sector.’

SIGN UP
For your free daily news bulletin
Highways jobs

Director of Social Work and Social Care

Trafford Council
£100,731 to £104,625
You will join a values-driven senior leadership team, providing visible and responsive leadership. Manchester
Recuriter: Trafford Council

Housing Ombudsman

Housing Ombudsman Service
£130,095 per annum, negotiable based on experience.
The Housing Ombudsman Service allows colleagues to choose if they wish to work in the London office, from home or a hybrid of the two London (Greater)
Recuriter: Housing Ombudsman Service

Head of Legal and Monitoring Officer

Powys County Council
£90,347 – £98,135 per annum/y flwyddyn
We’re seeking an energetic, innovative, and inspirational leader to join our team at Powys County Council Powys
Recuriter: Powys County Council

Senior Business Development Officer (MaaS)

Essex County Council
£36341.0000 - £42754.0000 per annum
Senior Business Development Officer (MaaS)Fixed Term, 2-year contract with potential for extension Full Time, 37 hours per week£36,341 to £42,754 per England, Essex, Chelmsford
Recuriter: Essex County Council

Customer Advisor (Events) - Braintree District Council

Essex County Council
Up to £13.8000 per hour
Customer Advisor (Events) - Braintree District Council£13.80 PAYE / £17.67 Umbrella Braintree, EssexPart-Time, Temporary Closing Date
Recuriter: Essex County Council
Linkedin Banner