Thursday 26th September, 2019
UK construction firm Kier plans to reduce further use of its supply chain finance scheme by 50 per cent over the next year, the group's management has announced.
Last week Kier announced a £245m pre-tax loss in the year to 30 June 2019 as the firm pushed ahead with an expensive restructuring programme. This includes the sale of Kier Living the homebuilding division.
Finance director Bev Dew said: “The group is targeting the reduction of its utilisation of its supply chain finance facility by around 50 per cent in the coming year.”
He added “This has now commenced and will be accelerated by the disposal of the residential business, which was a £35m allocation of the overall £195m facility.”
Changes to the board were also announced, Bev Dew will step down from the role of Group Finance Director by 30 September 2019 following the company's results for the 2019 financial year. Simon Kesterton has been appointed as his replacement, previously the Group Finance Director at RPC Group plc. Phil Cox will retire as Chairman and step down from the board once a successor has been appointed.
Under the Kier Early Payment Scheme, suppliers can choose to draw down payment of invoices, which typically have terms of around 60 days for construction suppliers, in 21 days. Suppliers pay a fee to the bank that administers the scheme to access their money early. Suppliers to Kier Limited are now paid in 32 days on average compared to 43 days in June 2018. According to Construction News.