UK builder Kier Group today reported a 14.5% slump in first-half underlying earnings on higher expenses, a day after it hired the former Carillion CEO-designate to run the company.
Kier said its underlying operating earnings fell to £51.8m for the six months ended December 31 from £60.6m the same time the previous year.
Administrative costs jumped nearly 35% to £202m during the six period.
Earnings also included €10m in net costs, stemming from its restructuring plan, which Kier launched last year to cut debt and divest non-core assets.
Kier builds and maintains highways, railway tunnels and houses.
It hired Andrew Davies as its chief executive officer yesterday as it strives to cut debt and respond to problems afflicting the wider outsourcing industry.
The UK construction industry has been under scrutiny after the collapse of Carillion last year forced regulators to tighten rules for private companies operating in the public sector.
Kier today reported a 22.9% jump in average month-end net debt partly due to a previously disclosed accounting error.
This emphasised the need to rein in spending to avoid the fate of Carillion and Interserve, which was placed in administration last week.
The company also said it was experiencing some volume pressure in highways, utilities and housing maintenance markets, but reported a 2% increase in its order book to £10 billion.
