Contractor hit with 拢22m of integration and acquisition costs, which brings down its half-year profit to 拢6.3m
Kier鈥檚 pre-tax profit has nearly halved after it was hit with 拢22m of one-off cost related to the acquisition of May Gurney, which it bought last July.
In a statement to the City, Kier reported a pre-tax profit of 拢6.3m in the six months to 31 December 2013, down from 拢12.5m over the same period of 2012.
The fall was largely due to 鈥渂usiness integration and restructuring鈥� and 鈥渁cquisition鈥� costs totalling 拢22m.
The firm also incurred finance costs and amortisation of assets bringing the total non-underlying items to 拢30.5m.
This compared with just 拢6.9m of non-underlying costs - mostly related to closure of Kier鈥檚 scaffolding business, restructuring and finance costs - incurred in the last six months of 2012.
Without these items included Kier reported an underlying pre-tax profit of 拢36.8m in the six months to 31 December 2013, up 90% from the 拢19.4m underlying pre-tax profit it reported for the same period of 2012.
Kier also moved into a position of net debt from at the end of 2013 from a position of net cash at the end of 2012.
On 31 December 2013 Kier鈥檚 net debt stood at 拢138m, compared with a net cash of 拢60m at the end of 2012.
The firm reported a 47% increase in revenue to 拢1.4bn in the second half of 2013, up from 拢976m in the second half of 2012.
It said like-for-like revenue grew 12% between the two periods.
Writing in the results, Kier鈥檚 chief executive Paul Sheffield said he was 鈥減leased with the performance of May Gurney鈥�, which Kier acquired last July.
He added: 鈥淭he acquisition has consolidated the group鈥檚 position in support services, providing a range of complementary services to clients in the highways, transport and utilities sectors.
鈥淭he integration remains on course, with good customer retention, new contract extensions and revenue synergies. We are on track to deliver the anticipated 拢5m cost savings in this financial year.鈥�
He said he was 鈥渆ncouraged鈥� that the 鈥渦pturn in construction workloads observed last year has been sustained鈥� but warned there would be continued pressure on margins and cash generation.
Sheffield added: 鈥淎s reported at the year end, we are seeing the early signs of economic recovery across the country. Our wider portfolio of offerings, strong cost management, a growing order book of over 拢6bn together with our strong capital structure, positions us well for the future.鈥�
Kier鈥檚 construction division reported a 18% increase in revenue to 拢742m in the second half of 2013, up from 拢627m in the second half of 2012.
It also reported a 28% increase in underlying operating profit to 拢17.3m in the second half 2013, up from 拢13.5m in the same period of 2012.
It said the firm had picked-up a lot of work through frameworks and in the infrastructure sector.
The only division of Kier to experience a fall in revenue was Kier鈥檚 property division, which reported revenue of 拢127m in the last six months of 2013, down from 拢138m in the last six months of 2012.
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