(Reuters) - British builder Kier Group on Wednesday reported a 14.5 percent slump in first-half underlying earnings on higher expenses, a day after it hired former Carillion CEO-designate to run the company.
Underlying operating earnings fell to 51.8 million pounds for the six months ended Dec. 31 from 60.6 million pounds, as administrative costs jumped nearly 35 percent to 202 million pounds during the period.
Earnings also included 10 million pounds ($13.25 million) in net costs, stemming from its restructuring plan, which Kier launched last year to cut debt and divest non-core assets.
Kier, which builds and maintains highways, railway tunnels and houses, hired Andrew Davies as its chief executive officer on Tuesday as it strives to cut debt and respond to problems afflicting the wider outsourcing industry.
The construction industry has been under scrutiny after the collapse of Carillion last year forced regulators to tighten rules for private companies operating in the public sector.
On Wednesday, Kier reported a 22.9 percent jump in average month-end net debt partly due to a previously disclosed accounting error, emphasizing the need to rein in spending to avoid the fate of Carillion and Interserve, which was placed in administration last week.
The company also said it was experiencing some volume pressure in highways, utilities and housing maintenance markets, but reported a 2 percent increase in order book to 10 billion pounds.
Reporting by Muvija M in Bengaluru; Editing by Anil D'Silva