Kier to sell housing businesses, cut 1,200 jobs and suspend dividend

Credit: REUTERS/Peter Nicholls

Kier Group will sell its housebuilding and property businesses, cut about 1,200 jobs and suspend its dividend for at least two years to lower debt and stabilise the business, it said on Monday.

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LONDON, June 17 (Reuters) - Kier Group KIE.L will sell its housebuilding and property businesses, cut about 1,200 jobs and suspend its dividend for at least two years to lower debt and stabilise the business, it said on Monday.

The company said it would also sell its facilities management and environmental services units, leaving it focused on regional building, infrastructure, utilities and highways.

Shares in Kier, which has contracts for major projects such as London's Crossrail link, hit a record low on Friday after a report said the company was rushing to sell its housebuilding business at a discount to cut mounting debt.

The report came after the company warned on profit this month, blaming higher costs and pressures on its highways, utilities and housing maintenance businesses.

Chief Executive Andrew Davies, who took charge in April, said the actions would simplify the company's portfolio and focus on cash generation to reduce its debt.

"By making these changes we will reinforce the foundations from which our core activities can flourish in the future, to the benefit of all of our stakeholders," he said.

Kier said that 650 full-time employees would leave by the end of this month and a further 550 would leave next year as part of a move to save costs of about 55 million pounds ($69 million) from its 2021 financial year.

(Reporting by Justin George Varghese in Bengaluru and Paul Sandle in London Editing by David Goodman)

((justin.varghese@thomsonreuters.com; Tel: +91 80 6749 3486; Reuters Messaging: justin.varghese.thomsonreuters.com@reuters.net))

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