The company said underlying operating profit for 2019 will be £25mln below its previous guidance due to lower-than-expected sales in its building division as well as “volume pressures” in its highways, utilities and housing maintenance arms.
The group, which has contracts for Britain’s high-speed rail project that will connect London with other major UK cities, added that costs associated with its restructuring programme would be £15mln higher than previously forecast.
Kier also warned on its debt. It expects to report a net debt position for the end of this month, which would have an “adverse impact” on its financial year 2019 average month-end net debt position.
Earlier this year, the group revised up its debt by £50mln following an accounting error.
Shares plunged 39.3% to 167.0p in morning trading.
In March, Kier posted a first-half pre-tax loss and cut its interim dividend as it invested in a turnaround plan.
Kier’s new chief executive, Andrew Davies, is leading a strategic review of the business and the company expects to announce the outcome of this at the end of July.
Davies took the helm in April after former boss Haydn Mursell was ousted in January following a £264mln emergency rights issue.
“It is little wonder that Kier lost nearly a third of its value this morning.”
Mould said while operating profit will be lower than previous expectations, “perhaps more significant” is the revelation that the company will no longer escape a net debt position by its year end on June 30.
He added: “Coming hot on the heels of a botched rights issue, a change at the top and amid continuing pressure on the construction space, today’s profit alert adds up to a pretty sorry picture with the costs of a turnaround programme also spiralling.”