StockMarketWire.com - Kier Group swung to a first-half pre-tax loss as its costly turnaround programme to streamline operations and weak performance in its developments & housing segment hurt performance.

For the six months ended 31 December, the company reported a statutory pre-tax loss of £35.5m compared with a profit of £34.3m a year earlier and revenue increased just 2% to £2.2bn.

Its developments & housing segment saw revenues slide 19% to £419.1m partially offsetting revenues from infrastructure services and buildings segments.

The costs of implementing the Future Proofing Kier turnaround programme in the first half of the financial year had exceeded the savings by £10m.

The combined order book rose to £10.0bn at 30 June 2018, from £9.8bn reported a year earlier.

An interim dividend of 4.9p was proposed, which was well below the 23p seen last year.

'Our regional building and property development businesses continue to operate well, although we are experiencing some volume pressures in the highways, utilities and housing maintenance markets,' said Philip Cox, Executive Chairman.

'The Group has a significantly strengthened balance sheet following the completion of the rights issue in December 2018. The Board continues to focus on simplifying the Group, improving cash flow generation and net debt reduction, and forecasts a net cash position at 30 June 2019.'

'Whilst the Board notes the current political and economic uncertainty in the UK, and the implications for third party investment, the Group is maintaining its underlying FY19 expectations, with the full-year results being weighted towards the second-half of the financial year, as expected.'

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