Kier chief executive Andrew Davies said he was shocked at the size of the loss his company had to announce for its last financial year.
The contractor revealed a £245m pre-tax loss for the year ended 30 June yesterday morning.
Asked whether he thought people would be shocked at the size of the loss, Mr Davies said: “Well, I was. Let’s not kid ourselves, it’s a big number. This is a disappointing set of results.”
The former Wates boss insisted he had “not underestimated the challenge” when he took on the CEO role at Kier. “I was familiar with the issues at Kier some years ago, and I had my views on what was going on,” he said.
“The core of this business is very, very good,” Mr Davies said, adding that his plan was to simplify the group, repair the balance sheet and generate more cash.
“These exceptionals [costs] and these results really do lay down the foundations for us to do that.”
Kier’s loss was largely due to writedowns and restructuring costs rather than cash being lost on projects. Mr Davies said the moves were necessary to prepare Kier Living and its property interests for sale.
“It [the loss] reflects the decisive action we took in the June announcement,” he said.
“It’s an impairment on the balance sheet reflecting the value of the land, and what it should enable us to do is sell it at its market value.”
The book value for Kier Living is £120m.
Kier also revealed losses on the Mersey Gateway bridge totalling £33m over the past two years.
The project is “very close to completion”, according to Mr Davies.
He said he had not “spent a huge amount of time” looking at the project since taking over in April, but he thought the reasons for the loss were what he called “the usual ones: cost, schedule [and] capability”.
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