But listed specialist still wary of working with ‘troubled contractors’
Listed steelwork specialist Billington has said it has more confidence that Kier will settle its bills if it decided to take on extra work for the firm.
In its interim results published yesterday, Billington said it had “limited exposure to the more troubled larger contractors” and later told Building that 90% of its client base was credit insured.
When asked about the remaining 10%, Mark Smith, chief executive of Billington, said it was “troubled in so much that Kier are a client”.
Since getting rid of its previous chief executive in January, Kier has brought in a new boss, the widely regarded Andrew Davies, begun a restructuring to pay off its crippling debt levels and has managed to improve its payment record to suppliers.
Smith (pictured) added: “We’re watching [the situation] closely, and we’re limiting our exposure to them to within our credit insurance, [but that] wouldn’t preclude us taking a project on with them.”
“[We could accept more work] if it was sufficiently insured or within an acceptable risk profile – the order books are open if they want to come and talk to us.”
In April, Billington, which is working with Kier on a retail scheme in Bournemouth, said it liked working with firms such as Wates, ISG and Sir Robert McAlpine – while it dodged poor payers.
But Smith said Kier “had been good” to Billington and added: “They have stayed within their terms, in the main, honouring the contract points and their obligations.”
Kier has come in for sustained criticism over the time it has taken to pay suppliers and last October was savaged for its payment record at an ongoing parliamentary inquiry into how government can help small businesses.
But in its annual results last week it revealed that “a significant proportion” of the £250m it raised in last year’s rights issue “was used to accelerate payments to the supply chain”.
It said that in the second half of its financial year, it brought down the average time it takes to pay suppliers from 57 days in the first half to 41 and added: “The group places significant value on the relationship with its supply chain.”
Last week Kier announced that it had crashed into the red for the year to June, after £341m of exceptional items sent it to tumbling to a £245m pre-tax loss.