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Construction giant Kier Group has said it will stop new investment into its property development business, in a fresh blow to the Government’s housebuilding ambitions.
The FTSE 250 company said there will be “no investment in new property developments” from the 2027 financial year, with funds re-allocated to other parts of the firm.
Shares in the company ticked higher in early trading as a result.
Chief executive Stuart Togwell said Kier is taking “important steps to strengthen and simplify the business”.
The move will allow Kier to focus on its core infrastructure and construction businesses and strengthen the group’s balance sheet, it told shareholders.
open image in galleryThe property arm, which largely works through joint ventures with other firms, invests and develops both commercial and residential urban regeneration schemes across the UK.
Kier revealed that revenues across the business jumped to £63 million for the year to June 30, from £38 million a year earlier, but saw operating profits drop by around a quarter amid pressure from “the wider macro-economic turbulence”.
The division currently has a residential portfolio of more than 5,000 units, with construction currently in progress on seven projects.
It came as Kier revealed that revenues grew by 7.5% to £4.39 billion for the year to June, compared with a year earlier.
This included 10% growth in its infrastructure arm, the group’s largest division, amid work on UK fusion energy projects and work for National Highways.
Adjusted pre-tax profits increased by 8.8% to £136.4 million for the year.
Mr Togwell added: “I am pleased to report that Kier has delivered another year of strong performance, achieving excellent revenue and profit growth.
“We continued to bolster the group’s financial profile, reaching an average net cash position for the first time in over a decade, a significant milestone from which to build.”