Kier Group is considering hiving off part of Mouchel, which has offices in Liverpool and Manchester, little more than a year after it was acquired.
Kier used a trading updtate to the Stock Exchange to reveal it was evaluating “the strategic options for the Mouchel Consulting business, including a possible sale.”
Mouchel Consulting’s profit before interest and tax in the year to the end of June 2016 was £8m and net assets were £25m at 30 June 2016. Kier said it would expect to make a profit on the completion of any disposal. Mouchel Consulting is a sub-division of Mouchel Group, acquired by Kier in April 2015 for £265m.
Elsewhere in the update, Kier said it was taking a £53m hit on streamlining measures including closing its Caribbean construction arm and accounting foir future losses on waste recycling contracts in Cheshgire and East Sussex, due to the falling prices of oil and recycled waste.
The group said “underlying trading performance has remained in line with management’s expectations.”
On Brexit, Kier added: “The EU referendum result has created some uncertainty albeit with no impact on the business to date. The board, however, believes the group’s breadth of activities and strong order books provide both visibility and resilience. The acquisitions of May Gurney and Mouchel have significantly increased the level of visible, long-term earnings from our construction and services divisions. The property division has a healthy pipeline of projects totalling more than £1bn, largely comprising non-speculative schemes, and the residential division’s mixed tenure business has a pipeline of over £600m.”
The group had net debt of £140m at 30 June, ahead of the forecast range of £150m to £170m.
Shares in Kier fell more than 2% to 1,026p