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Will the Kier share price ever recover?

The construction services and property group’s stock has lost more than 75% of its value since the start of the year, but with short sellers retreating is this a sign its share price will start to recover some of its losses?

Kier Group saw its share price hit an all-time low of 61p in July, with investors fearing that the company would follow in the footsteps of its rival Carillion which collapsed in January last year in what was the largest ever trading liquidation in the UK.

Since then, the share price has recovered slightly, up 25% since its July low to trade at 86p as of 16:20 GMT on Tuesday. Short sellers have also retreated slightly since July, suggesting the company’s turnaround strategy could help its share price recover some of the ground it has lost.

However, the construction services and property group’s stock is still down 75% since the start of the year, with it facing numerous challenges.

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Kier Group sees short sellers retreat

Short sellers have retreated since July, where the company had a 12.16% short position against it.

Since then, short interest has more than halved to 5.53%, with three of the four funds betting against the stock reducing their positions against Kier Group in November.

BlackRock Investment Management, TT International and GLG Partners all reduced their short positions by -0.13 (remaining short position held 1.26%), -0.14 (1.68%) and -0.86% (1.73%) respectively, according to data compiled by the Financial Conduct Authority.

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Kier Group progresses with turnaround strategy

Kier Group continues to progress with its turnaround strategy, with the company on course to deliver a headcount reduction of around 1,200 by 30 June 2020 and annual cost savings of at least £55 million in the financial year ending 30 June 2021, according to its latest trading update.

The company continues to progress with its sale of Kier Living, its housebuilding division, and to explore options to further accelerate the release of capital from its property business.

‘We continue to build the foundations for the future of the Group through the execution of our strategic priorities,’ Kier Group CEO Andrew Davies said.

‘Our core businesses are performing in line with our expectations and we continue to win work from a number of our major clients, whilst significantly reducing the Group's overheads and costs.’

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

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