Cox, who has been chairman for the past two years, will step down from the board once a successor has been appointed.
“He has overseen the recent appointment of a new management team and has decided that it would now be appropriate for the company to appoint a new chairman to work with the board to deliver the strategic actions announced on 17 June 2019,” Kier said.
The company made the announcement as it unveiled it had slumped to a loss in the year to 30 June 2019.
Kier swings to a loss
It made a pre-tax loss of £245mln, compared to last year’s profit of £106mln, after taking a £341mln hit related to the costs of preparing to offload some of its businesses, restructuring charges and loss-making contracts.
Revenue fell to £4.49bn from £4.51bn a year ago due to lower volumes in the infrastructure services, highways and utilities divisions. The order book stood at £9.4bn, down from £9.8mln the previous year.
In June Kier revealed plans to overhaul the business following a strategic review.
The company said it would sell its housebuilding and property businesses, cut 1,200 jobs and suspend its dividend for at least two years in bid to lower debt and simplify its operations.
The contractor also said it would also dispose of its facilities management and environmental services units, leaving it focused on regional building, infrastructure, utilities and highways.
Overhaul plan on track
Chief executive Andrew Davies said in the full-year results statement on Thursday: “The sale of Kier Living is progressing well and we are exploring options to accelerate the release of capital from our Property business.
“The re-shaping of the group is designed to reduce its overall indebtedness during FY2020 and to restore Kier to robust financial health.”
Kier ended the 2019 financial year with net debt of £167mln, compared to £186mln last year.
The group has been trying to rebuild its reputation after an emergency cash call, an accounting error and a shock profit warning that led the resignation of former chief executive Hayd Mursell.
“Kier experienced a difficult year, resulting in a disappointing financial performance,” Davies said.
“However, we are building firm foundations for the future: we have a new management team in place, we have defined our strategic priorities and we are taking decisive actions to deliver them.”
Shares fell 2.1% to 129p in morning trading.
It was a mixed trading outlook divisionally, said broker Numis, noting “much higher” exceptional costs than the first half, adding up to a full year total of £341mln, reflected the “much-needed re-shaping” of the business.
Numis said that even with lower PBT estimates and cash costs of exceptionals it would expect net debt to decline – driven by disposals and reduced capital employed in asset-intensive businesses.
“Our view therefore remains that Kier is a special situation where substantial recovery potential will be reflected as debt reduces; FY results are inevitably convoluted, but are a first step on the road to recovery.”
Peel Hunt, ‘house’ broker, cut its EPS forecasts 23% for the coming financial year “to reflect a rebasing of expectations”, but still assume a reduction in average net debt even before any disposals.
“The disposal of Kier Living is progressing well and we are encouraged by the progress in reshaping Kier and the strengthening of the balance sheet. The new management is positioned to restore value,” analysts wrote.
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