Business has been up for sale since summer 2019
The up-for-sale housing arm of Kier has crashed to a pre-tax loss of more than £89m, the firm’s latest accounts have revealed.
Kier, which is due to give a trading update next week, has been trying to sell its Kier Living business since summer 2019 when then new chief executive Andrew Davies decided it was no longer core.
In its latest annual report, published last October, Kier valued the housing business at £110m, a fall of just over £51m on the previous estimate which it said it was taking as an impairment. It said it had revised the value down “due to the uncertainties in the market resulting from covid-19”.
The month before, Davies said he expected the sale, which has been going on since June 2019, to be wrapped up in the next six to 12 months.
Kier Living’s latest accounts for the year to June 2020, signed off just before Christmas, show that it racked up a pre-tax loss of £89.4m from a £6.5m loss last time.
It said the bulk of the loss was caused by having to write off a £50m loan to another residential business, Kier Caledonia Homes, because the firm did “not have sufficient assets to repay the debt”.
But it also took a £22.3m hit on exiting fixed-price building contracts while it said the cost of dealing with the covid-19 pandemic had racked up a £4.4m bill.
Turnover during the period fell from £118m to £55m, with the firm adding that revenue had been hit by the pandemic and subsequent first lockdown announced by prime minister Boris Johnson on 23 March.
It said it completed 1,053 homes in the year, a fall of 38% on the 12 months before.
And the number of people it employed during the year dropped from 606 to 554. It said it had cut a further 111 jobs after the year-end, spending £2.2m on restructuring costs.