Buckingham break-up begins as Kier snaps up £150m rail business

The break-up of Buckingham has begun with Kier picking up the firm’s rail division, which includes its jobs for Network Rail and HS2, for £9.6m.

The move is expected to add more than £150m of revenue to Kier’s transport arm and saves the jobs of 180 staff out of the 660 currently employed by Buckingham.

In its last set of accounts, Buckingham’s rail business had a turnover of £92m in the year to December 2021 and a forward book of £176m. Its jobs include work at Leeds station where it is extending platforms.

And the firm’s HS2 business, set up in 2020, had income of £56m in 2021 with the company working for a team including Kier on a series of contracts on the new railway across the Chilterns.

Andrew Davies, chief executive of Kier, which is due to release its 2023 results next week, said: “We have previously stated that we would consider value accretive acquisitions in core markets where there is potential to accelerate the medium-term value creation plan. This acquisition is one such example – it is an excellent strategic fit and accelerates our rail strategy, providing work with new rail clients and increasing our capabilities.”

Buckingham’s other major businesses include its £260m building arm, which includes its logistics and warehouse work, civil engineering and sport and leisure.

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Buckingham has been on the brink since last month when it said it intended to appoint an administrator after racking up “deep losses and interim cash deficits on the three major stadium and arena contracts, and a substantial earthworks contract in Coventry”.

Though not named, the stadiums jobs are believed to be new stands at Fulham and Liverpool while the firm is still carrying out work on a multi-storey car park opposite Swansea Arena. The arena was completed by Buckingham for the city council last year but the car park is running months behind schedule after the paint, which coats the steel on the structure of the car park, needed to be removed and reapplied.

At the time, Buckingham said it was looking to “explore a sale of all or part of the business in a very short period” – which it said on 17 August would be within days or weeks – “to preserve as much of the business as possible”.

In its last set of accounts, for the year to December 2021, turnover went up 14% to £665m but the firm racked up a £10.7m pre-tax loss with the firm blaming a bust subcontractor and a client that kept changing its mind on a stadium contract, widely believed to be its scheme at Fulham’s Craven Cottage ground, sending it to only its second annual pre-tax loss since being set up in 1987. The firm had been predicting income this year of around £700m.