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Gloucestershire Business News

Kier reports loss as pandemic leaves its mark

Kier Group chief executive Andrew Davies admitted the coronavirus pandemic had made a huge impact as the company reported a pre-tax loss of £225.5million for the first six months of the year.

The construction firm, which has a base in Quedgeley and is involved in various projects around the county, saw revenues fall 15 per cent to £3.4billion as the pandemic bit in the final three months of the period.

While the construction division made an operating loss of £58.9million with revenue falling 15 per cent to just over £1.5billion, infrastructure service made an operating profit of £9.6million as revenue was down 10 per cent at £1.5billion.

Adjusted profit before tax fell 70 per cent on the previous year to £16.9million.

Mr Davies said: "This financial year has been a difficult one. The effects of COVID-19 adversely impacted the group's performance in the final three months of the financial year as the business adapted to working under revised site operating procedures.

"As explained in 2019, Kier needs substantial restructuring, but has great potential."

He continued: "While first half volumes were lower, this was anticipated as significant contracts concluded and frameworks transitioned. The decisive cost-saving measures allowed profits to improve despite these reductions in revenues.

"As a result, the group was trading in line with expectations but the effects of COVID-19 has reduced the amount of work we were able to undertake in the key final quarter of the financial year and costs have increased."

He said the company has a strong order book worth £7.9billion with the new financial year in line with expectations.

"While the group anticipated the effects of COVID-19 will continue, the strategic actions being implemented by the new senior management team are designed to ensure Kier is well place to benefit for the proposed substantial increase in UK infrastructure investment."

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