London — Construction and services group Kier’s shares fell 40% to their lowest level in two decades on Monday after a profit warning from the British firm, whose mounting debts also fuelled fears of a dividend cut and another funding-raising.
Kier is undergoing a review to cut debt and simplify its structure under CEO Andrew Davies, who took charge in April after the company failed last December to convince shareholders to back a rights issue at 409p per share.
“It would surprise me if they didn’t at least trim their dividend,” said Paul Mumford, portfolio manager at Cavendish Asset Management, which holds a small stake in Kier. Kier flagged higher-than-expected costs of £15m from its restructuring, saying these reflected “an acceleration of the programme” since the appointment of Davies and adding that the review’s conclusions will be announced on July 30.
“From a recovery point of view if there’s decisive action, and maybe fairly ruthless action, to get the thing back on an even keel, then that would be a way the share price may recover,” said Mumford.
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