Kier share price: what’s the latest as stock climbs 40% since August?

The UK construction, services and property group finally seems to be turning a corner with its stock making significant gains over the last four weeks, but there is still a lot of work to do.

Since completing an emergency rights issue in December last year which saw only 38% of shareholders take up the call, leaving Kier Group’s lenders to holding around £100 million of new shares, the company continues to struggle.

However, over the last four weeks, its share price has climbed more than 40%, up from 77p at that start of August to 115p a share as of 13:15 GMT on Thursday.

Over the last 12 months, the UK construction, services and property group has seen its stock lose close to 90% of its value, with it clear that it still has a mammoth task ahead of it, but the recent uptick in its share price bodes well for its turnaround strategy.

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Future Proofing Kier

The company has taken steps to reduce costs and strengthen its balance sheet through its Future Proofing Kier (FPK) programme. Over the first six months of trading, the company has delivered £4 million in savings and plans to be earnings and cash flow neutral at the end of the financial year.

The FTSE 250 company’s new CEO Andrew Davies announced in June that the group will cut 1,200 jobs to reduce costs and reduce debt to avoid joining rivals Carillion and Interserve on the scrap heap.

Kier plans to generate net savings of £20 million in 2020, driven by increased cost savings and continued progress of its disposal programme, with it completing the sale of Kier Highways Services Australia at the end of last year.

Kier hopes for strong end to 2019 despite Brexit uncertainty

The company’s regional and property development units continue to operate well, though there are some volume pressures in the highways, utilities and housing maintenance markets.

‘I believe that these businesses will deliver long-term, sustainable revenues and margins and are inherently cash generative,’ Davies said earlier this year.

The company has blamed ongoing political and economic uncertainty over Brexit for hampering third party investment, though Kier has left its full-year guidance unchanged, with its full-year results weighted towards the second-half of the year.

Kier will unveil its full-year results on September 19.

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