Embattled construction firm Kier Group has reported a loss in the first half, as it prepares for the arrival of a new boss to lead a turnaround.
The company, which has contracts with Crossrail and Highways England among others, posted a pre-tax loss of £35.5 million for the six months to December 31, compared with a profit of £34.3 million the previous year.
Non-underlying charges of £59.9 million were recorded, including a £25 million hit from its Broadmoor Hospital redevelopment project.
On an underlying basis, revenue for the period was up 2% to £2.2 billion while pre-tax profits fell 21% to £39 million.
The Future Proofing Kier (FPK) cost-cutting programme delivered savings of £4 million, with net savings of £20 million anticipated next year.
Last week, the company announced that its net debt was higher than previously thought, coming in at £180.5 million, up from the £130 million stated at its previous trading update.
Kier said the additional £40 million had been misclassified in an accounting error.
Executive chairman Philip Cox said: “The group has a significantly strengthened balance sheet following the completion of the rights issue in December 2018. The board continues to focus on simplifying the group, improving cash flow generation and net debt reduction, and forecasts a net cash position at 30 June 2019.”
Earlier this week, Kier named Andrew Davies as its new chief executive, with effect from April 15.
Mr Davies had been lined up to take the top job at contractor Carillion just a week after it went into liquidation. Previously he ran Wates Group and spent more than 28 years at BAE Systems.
He will lead a turnaround focused on improving cash flow and simplifying the business.
His appointment comes after the departure of Haydn Mursell, who resigned in January after pressure from some of Kier’s biggest shareholders.