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

Chief Executive

Salford Community Leisure
£100k+ (pay award pending)
Salford Community Leisure (SCL) is a community benefit society with charitable status that manages sport, leisure, and cultural services... Salford, Greater Manchester
Recuriter: Salford Community Leisure

Assistant Team Manager - Hospital Discharge

Durham County Council
Grade 12 - £44,075 - £48,226
Join us as we strengthen the heart of our hospital’s social work service. We’re seeking a supportive, skilled leader who can guide a dedicated team th Durham
Recuriter: Durham County Council

Customer Service Officer

Durham County Council
Grade 6 £28,142 to £31,022 per annum
Are you calm under pressure, enjoy working with people, and thrive in a role where no two days are the same? We’re looking for a confident, approachab Durham
Recuriter: Durham County Council

Apprentice Business Administrator

Durham County Council
£15,434 per annum (£8.00 per hour) NMW
Earn.  Learn.  Qualify. Do you want to earn while you learn? Do you want the opportunity to grow, develop and be the best version of yourself? Then wh Newton Aycliffe
Recuriter: Durham County Council

Lunchtime Supervisor

Durham County Council
£24,796 (pro rata)
Lunchtime Supervisor 2 positions available. Grade 1- £24,796 (pro rata) Permanent- Part time- 8
Recuriter: Durham County Council
Linkedin Banner