Bitter blow for Woodford as Kier crashes again

KIER shares have tumbled to a record low in yet another devastating blow for beleaguered fund manager Neil Woodford.

The troubled construction group’s stock crashed by more than a third, amid speculation that Kier may launch a cutprice sale of its housebuilding branch to pay off debt.

It is another setback for Woodford, who owns 15.9pc of the company. As Kier crashed by 35.5pc, or 72p, to 130.8p yesterday, wiping £116.7m off its market value, Woodford’s stake slid by £17.9m.

It is the second time Kier has suffered a sharp price fall, after diving 41pc on Monday last week as Woodford’s woes began.

Kier is said to have sounded out advisers regarding a potential sale of its housing division for between £100m and £150m.

But the tumbling share price suggests investors were hoping buyers would stump up more for Kier Living, which built 2,042 homes last year.

Woodford (pictured) is in dire straits and has shut his fund to withdrawals after a stampede for the exit.

Kier’s problems could not have come at a worse time. The fund manager first notified the market that he had a stake in the contractor in 2018. At that point, shares were trading at 919.3p.

He gradually kept building his stake, but so far Kier has refused to pay any rewards. Its value has tumbled by 85.8pc from when he first invested in the firm. If he sells any shares in Kier, Woodford will crystallise a massive loss.

Jason Hollands, of investment company Tilney, said: ‘The bad news just seems to keep coming for Woodford, and this is another blow for his funds. Kier is fast becoming yet another problem stock.’ Kier bosses’ move to sell parts of the business, which was first reported by The Times, comes as it struggles under growing financial pressure. Results for the last six months of 2018 show the contractor had a debt pile of £180.5m.

This month it warned profits for 2019 would be £25m lower than expected.

And this week major credit insurers Euler Hermes and Tokio Marine HCC, which offer cover for companies’ suppliers in the event that firms go bust and stop paying their bills, withdrew their cover for businesses that are supplying Kier. This could cause those suppliers to demand instant payment of their bills, further squeezing the company.

Kier has had a roller coaster year. In December, the firm launched an emergency fundraising to generate a vital extra £250m. But only 38pc of the new shares were picked up.

Kier declined to comment.