Kier swings to £35m loss as nightmare continues
Another day, another outsourcer reporting bad news.
After seeing Interserve hog the spotlight for most of this month, it was Kier Group’s turn to return centre-stage yesterday as it revealed it had swung to a loss for the first half of the year.
the FtSe250-listed construction and maintenance giant said administrative costs related to its debt-cutting turnaround plan helped push it to a £35.5m loss. this compared with a profit of £34.3m in the same period last year.
revenues at Kier, which builds and maintains roads, hospitals, schools and prison facilities, rose 3pc to £2.1bn and, while it managed to save £4m over the six months, the cost-cutting programme itself cost £14m to implement.
Shareholders in the hS2 contractor have now been given a little less love from the company – with the dividend falling to 4.9p a share from 23p a year earlier.
the results came a day after Kier announced that Andrew Davies, the man who was due to take over at Carillion before it went bust last January, will step in as chief executive next month.
Shares fell 11.3pc, or 54.6p, to 429.4p – around half what they were just six months ago.
there was better news for fellow FtSe 250 stock TI Fluid Systems. Shares in the car parts maker, which counts Ford and Aston Martin among its customers, surged as it not only came out with good growth but said it expects to outperform the car market again this year.
tI is helped by its growing emphasis on making parts for electric and hybrid electric vehicles. Profit before tax rocketed from £136m in 2017 to £187m last year – although profits in 2017 were knocked by £34m worth of costs related to its float. revenue at tI was flat in its first full year as a listed firm. the group hiked its full-year dividend and investors responded in kind, with shares rising 12.1pc, or 20.8p, to 192.5p.
the FTSE 250 as a whole slipped lower yesterday – shedding 0.35pc, or 162.31 points, to 19,388.98.
the FTSE 100 was dragged down by mining stocks as Brazilian company Vale said it was close to reopening its largest iron ore mine – triggering a plunge in iron ore prices. Rio Tinto lost 2.3pc, or 101p, to 4204p, and Antofagasta lost 0.7pc, or 7.4p, to 958.2p, as it was also hit by a hSBC rating downgrade to ‘reduce’ from ‘hold’.
the Footsie ended its rising streak as it lost 32.99 points, taking it down to 7291.01.
resources stocks were some of the other major movers on the main and AIM markets yesterday.
Kurdistan-focused Genel Energy said it will pay its first dividend next year even though it fell to a loss in 2018.
Genel intends to pay shareholders at least £30m a year from 2020. It posted a pre-tax loss of £215m in 2018, down from a profit of £206m in 2017. Shares dived 5.3pc, or 12p, to 213p. oil and gas company Highlands
Natural Resources said it had raised around £1.6m through a share placing to help fund a new cannabis business.
highlands is moving into the booming market for natural remedy cannabidiol – oil made from cannabis plants.
Its new subsidiary, Zoetic organics, will lease a 33,000 square foot facility in Colorado to grow the cannabis plants using hydrogen from its gas operation in Kansas as a fertiliser. Shares lost 8.5pc, or 0.82p, to 8.88p. And Greenland-focused Bluejay
Mining has quashed speculation that it will soon be fundraising, saying it has enough cash to last until spring 2020. the firm is working towards a study of its Dundas project, which it says is the world’s purest resource for ilmenite – used in white paint. Shares rose 7.2pc, or 0.66p, to 9.76p.