Non-core business will be closed or sold and some offices shut.
Reporting its interim results for the six months to 31 December 2012, Kier鈥檚 revenues were down nearly 7% to 拢976m (2011: 拢1,046m). Underlying pre-tax profits were down 20% to 拢27.0m (2011: 拢34.0m).
Construction margins shrank back to 2.1% (2011: 2.5%) and services margins to 4.3% (2011: 4.5%).
Chief executive Paul Sheffield said: 聽鈥淲e have undertaken a comprehensive review of the [construction] division, particularly the UK building activities, to restructure the business in light of the forecast market conditions and to ensure that we drive efficiency throughout our operations to hold margins close to current levels. This will involve the closure or disposal of non-core activities and restructuring our network of offices. The process will continue in the second half of the year however it will not compromise our commitment to a regional focus or the delivery of our services to customers, but will position us well to respond to any market recovery.
In construction, revenue decreased to 拢627m (2011: 拢720m) and operating profit shrank to 拢13.5m (2011: 拢17.8m).
In services, revenue was steady at 拢211m (2011: 拢218m). Underlying operating profit decreased 8% to 拢9.0m (2011: 拢9.8m).
The property division had revenue of 拢138m (2011: 拢108m) generating operating profit of 拢7.1m (2011: 拢10.0m).
Across the group, the order books remain steady, with 拢2.1bn booked for construction and another 拢2.1bn booked for services. This is much the same as this time last year. Approximately 拢800m of new business was picked up in the first half.
Mr Sheffield said: "I am pleased to report a solid set of results for Kier for the six months which demonstrate the strength and resilience of the Group in what remains a difficult market. Our three divisions create a well-balanced business model, which coupled with our strong balance sheet, will continue to underpin our future performance.
"We are encouraged by the opportunities arising in our infrastructure and overseas Construction operations. In addition our Services businesses continue to diversify providing a strong platform for growth.聽 In Property, our development and affordable housing pipeline has grown and now amounts to more than 拢1.3bn, and has attractive future prospects.
"Government announcements over the last year regarding investment in infrastructure and repairs and maintenance are positive for our business and we are well placed to benefit from those initiatives over the medium term."
He added: 鈥淲e have a strong capital structure and healthy order books, which provide a stable platform to underpin our future performance.鈥�
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