Business
Strategic review conclusions & indebtedness update
Strategic review conclusions & indebtedness update.
About this update from Kier Group Plc
[{"type":"text","content":"\n \nRNS Number : 4345C Kier Group PLC 17 June 2019 \n\n17 June 2019\n \nKier Group plc\nConclusions of strategic review, significant refocusing of Kier and update on indebtedness\nOn 15 April 2019, Kier Group plc (\"Kier\" or the \"Group\") announced that Andrew Davies, Chief Executive, would lead a strategic review which aims to further simplify the Group, better allocate capital resources across the Group and identify additional steps to improve cash generation and reduce leverage. This work has been accelerated over the last month due in part to the ongoing speculation regarding the Group's financial position. As a result, the Board is now announcing the conclusions of the strategic review and providing an update on the Group's indebtedness.\nStrategic focus\nKier has a number of high-quality, market-leading businesses, in particular Regional Building, Infrastructure, Utilities and Highways, which are valued by our customers. The performance of these businesses is underpinned by long-term contracts and positions on frameworks for Government and regulated clients. Together these businesses are expected to deliver long-term, sustainable revenues and margins and, with a renewed focus on their inherently cash generative characteristics, will be the core activities of the Group in the future.\n \nIn recent years, the Group has grown substantially, including through acquisitions. This strategy added a number of highly attractive businesses to the Group, including Highways, Utilities and Rail. However, the strategic review concluded that, during this period, there was insufficient focus on cash generation and that the Group today has debt levels that are too high. It also concluded that the Group's portfolio is too diverse and contains a number of businesses that are incompatible with the Group's new strategy and working capital objectives. \nKier is therefore today announcing a new strategy for the Group that will:\n· focus on Regional Building, Infrastructure, Utilities and Highways;\n· simplify the Group's portfolio by selling or substantially exiting non-core activities: Kier Living, Property, Facilities Management and Environmental Services;\n· fundamentally restructure the Group to reduce headcount by c.1,200 and deliver annual cost s...