Dominic Browne 17 June 2019

Kier to cut 1,200 jobs and ditch housing division

Kier to cut 1,200 jobs and ditch housing division image

Kier Group is to cut around 1,200 jobs and make savings of £55m over the next two years, amid a planned sell-off of many of its commercial interests.

Kier Living, Property, Facilities Management and Environmental Services are all set to be sold off or dramatically reduced due to debt and financing concerns.

In a statement to the market, the infrastructure company said that under the accelerated programme around 650 full time employees will have left by 30 June 2019 and an additional 550 are expected to leave during the financial year 2020.

'Following the completion of the programme, Kier expects to deliver annual sustainable cost savings of c.£55m from FY2021. The costs of delivering the programme are expected to be c.£28m during FY2019 and c.£28m during FY2020,' the firm said.

The Regional Building, Infrastructure, Utilities and Highways businesses are all expected to survive the chop.

'Together these businesses are expected to deliver long-term, sustainable revenues and margins and, with a renewed focus on their inherently cash generative characteristics, will be the core activities of the Group in the future,' Kier said.

A strategic review, accelerated amid recent debilitating market speculation, concluded that there had been insufficient focus on cash generation and the group has debt levels that are too high.

Kier said reported net debt at 30 June 2019 will be higher than current market expectations with an increase in this year's average month-end net debt to £420m-£450m.

'The Group has committed debt facilities of £920m, with its bank debt not maturing until June 2022 and the majority of its private placement debt maturing between 2021 and 2024.'

Newly appointed chief executive Andrew Davies said: 'Kier has a number of high-quality, market-leading businesses, in particular Regional Building, Infrastructure, Utilities and Highways. I believe that these businesses will deliver long-term, sustainable revenues and margins and are inherently cash generative.

'As previously announced, I have been leading a strategic review which has resulted in the actions being announced today. These actions are focused on resetting the operational structure of Kier, simplifying the portfolio, and emphasising cash generation in order to structurally reduce debt. By making these changes, we will reinforce the foundations from which our core activities can flourish in the future, to the benefit of all of our stakeholders.'

The Housing business is valued at £120m, while the Group's shares briefly rallied last week only to fall again in early trading.

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

This article first appeared on Transport Network

Fair funding delay image

Fair funding delay

The delay to the fair funding review can only add to anxiety over the future of local government, says Mark Whitehead
Highways jobs

Senior Traffic Engineer

East Riding of Yorkshire Council
£32,029 - £34,788 per annum
Currently seeking an enthusiastic and experienced individual to manage our Traffic Team. East Riding of Yorkshire
Recuriter: East Riding of Yorkshire Council

Youth and Community Based Commissioner- Colchester and Tendring

Essex County Council
£18117 - £19106.0 per month
Annual Salary JNC SCP 3 - Unqualified £18,117JNC SCP 6 - Qualified £19,106 We are currently seeking a Youth and Community Based Commissioner to suppo England, Essex, Colchester
Recuriter: Essex County Council

Networks Technician

Essex County Council
£24001.0 - £28280 per annum
Technology Services is focused on ensuring current and future investment in technology to maximise the opportunities to support ECC from a technology England, Essex, Basildon
Recuriter: Essex County Council

Youth Worker x7

Sandwell Metropolitan Borough Council
£18,795 - £19,945 per annum
Looking for a Youth Worker who can meet the needs and aspirations of young people and deliver high quality Youth Work. Sandwell, West Midlands
Recuriter: Sandwell Metropolitan Borough Council

Customer Specialist

Essex County Council
£20001.0 - £22220.0 per annum
Essex County Council (ECC) are currently recruiting for a Customer specialist within the Technical Processing and Optimisation Team. The Team is respo England, Essex, Chelmsford
Recuriter: Essex County Council

Local Government News

Latest issue - Local Goverrnemnt News

This issue of Local Government News explores how councils can tackle modern slavery and trafficking in their supply chains, finds out more about Cambridge's first cohousing scheme and the launch of a new project to build a shared service pattern library for local government.

This issue also contains a special focus on children's services and how councils are protecting children following local safeguarding children boards being abolished.

Register for your free magazine