Kier debt rises as it warns of £25m Broadmoor hit

Embattled UK contractor Kier today revealed it is now carrying £430m of net debt after it revised the figure upwards ahead of its interim results for the 2019 financial year.

Currently without a chief executive after the sudden departure of Haydn Mursell in January, the firm also warned it would take a £25m hit on the delayed redevelopment of Broadmoor hospital in Berkshire.

In an announcement this morning the contractor said it had revised its net debt position as at 31 December 2018 to £180.5m, up from the £130m estimated in its 22 January 2019 trading statement.

The recalculation means that average month-end net debt for the six months ended 31 December 2018 now stands at around £430m, up from £370m, reports Construction Manager.

The company said it had "identified a number of adjustments" totalling around £10.3m in the course of preparing its financial results, principally relating to its hedging activities, and has revised the classification of £40.2m worth of debt associated with certain developments assets held for resale.

Meanwhile, Kier announced that it would take a £25m hit in its 2019 results in relation to the delayed redevelopment of Broadmoor, which involves transferring nearly all of the hospital’s operations into new clinical facilities.

Kier said the first phase of the project is expected to be handed over "shortly" with the remaining work on the project, accounting for less than 10% of the project value, starting shortly afterwards.

The company said in a statement: "The group has recently agreed a process with the client which is designed to reach agreement with respect to the group’s entitlement to the additional costs associated with the project’s delay.

"Following its most recent review, the board has concluded that a non-underlying provision of £25m will be included in the Group’s FY19 interim results in respect of future recoveries from the client and other third parties."

Kier’s interim results are expected on 20 March.

Chairman Philip Cox is acting as executive chairman working with finance director Bev Dew and chief operating officer Claudio Veritiero until a new chief executive is appointed.

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