Contractor suffers after land writedowns and restructuring cost more than £40m
Land writedowns and restructuring costs pushed pre-tax profit at Kier down 18% from £77.6m to £63.4m in the year to 30 June 2008.
Despite a strong underlying performance that saw turnover rise 12% from £2.1bn to £2.4bn, the downturn took its toll on the housing and property businesses.
Chief executive John Dodds said the year was a tale of two halves. “Continued demand in our construction and support services businesses has contrasted with the sudden and dramatic effect of the credit crunch on the demand for private housing and development properties.”
Land writedowns totalled £31.3m and it also took a £9.5m hit in restructuring and redundancy costs following the housing collapse. These exceptional costs were offset against £16.2m in profit on the sale of its 50% investment in the Hairmyres Hospital PFI scheme in Scotland.
Home sales over the year fell 19% from 1,767 to 1,438 but sales of 611 in the second half was 35% down on the same period in 2007.
A company statement added: “Gross reservations for the first two months of the new financial year are around 76% below the same period last year reflecting continued tightening of mortgage availability and a general slow down in demand.”
Growth at its construction business was boosted by framework deals and expansion in the Middle East.
It finished the year with net cash of £144m.
The breakdown across its five divisions was as follows:
Turnover - £1.65bn (2007: £1.41bn)
Pre-tax profit – £59m (£38m)
Turnover - £394m (£316m)
Pre-tax profit - £14.2m (£10.5m)
Turnover - £243m (£325m)
Pre-tax loss - £23.4m (Pre tax profit: £32.8m)
Turnover - £70m (£61m)
Pre-tax profit - £4.1m (£7.6m)
Turnover - £15m (£15m)
Pre-tax profit - £16.9m (£700,000)