Kier鈥檚 annual accounts for the year to 30th June 2016 will show a 拢53m black hole for exceptional restructuring charges.
鈥淪implification of the group's portfolio is a priority,鈥� the board said today.
It is now looking to offload part of Mouchel after integration costs spiralled threefold from 拢15m to 拢44m.
Kier bought Mouchel in June 2015 for 拢265m, primarily for it its highway maintenance business. Mouchel鈥檚 historic core business is as a consulting engineer, before it started delving into the public services contracting market.
Kier has now put a 鈥榝or sale鈥� sign on Mouchel Consulting, whose earnings before interest and tax last year were 拢8m and net assets were 拢25m at 30th June 2016. It said that 鈥渁n evaluation of the strategic options for the Mouchel Consulting business, including a possible sale鈥� is expected to be completed 鈥渋n the coming months鈥�.
The Environmental Services business, predominantly May Gurney鈥檚 bin rounds and waste recycling, is also proving costly. 聽
In a trading update today, Kier鈥檚 board said: 鈥淭he financial performance of the Environmental Services continues to be affected by the low oil price and, consequently, the price of recyclates, despite stable operational performance at contract level. As a result, a provision of 拢35m will be taken in FY16, which provides for all future cash outflows on two environmental contracts of eight and 10 years' duration, respectively.鈥�
Of the West Indies, it said: 鈥淭he trading environment in the Caribbean remains challenging and, as a consequence, activities in the region are being wound down. A one-off exceptional charge of 拢18m will be incurred in the results for FY16, which relates to a write down in asset values, work in progress and redundancy arrangements.鈥�
Kier said: 鈥淔ollowing the integration of recent acquisitions, simplification of the group's portfolio is a priority, and will provide focus on the businesses which will underpin the group's growth expectations in our core markets; infrastructure, building and housing.鈥�
Got a story? Email news@theconstructionindex.co.uk
