Kier said the impact of rising costs meant its construction business was hit by delays in starting projects as clients took longer to sign off on works, blunting the revenue figure. business in the first semester.
Revenue from its construction arm, its biggest division in the first half of 2020, fell by a quarter in the six months to December 2021 to £681m.
Managing director Andrew Davies said the impact of inflation meant some clients were re-examining jobs.
“Headwinds are driving reassessments of business cases, which are causing delays in the creation of our jobs, especially in our construction industry,” he said. “Clients need to go back and get approvals in the wake of rising costs.”
Falling revenue led to a drop in construction operating profit from £30.7m to £12.8m.
But there was better news in infrastructure with first half revenue up 15% to £777m and operating profit up 8% to £22.5m .
Davies said the government was still committed to its leveling program and promised investment in infrastructure upgrades despite rising general inflation and the war in Ukraine.
“The whole country is facing inflationary pressures. From a trade point of view, Ukraine will not [inflation] so much the better, it will make things worse.
Kier said he was left with just £2.7m to pay in tax which the government had allowed to defer in the wake of the covid-19 pandemic after reimbursing £53m over the course of of the period. Davies said the outstanding balance would be settled by the end of the year in June.
The company said this and the impact of other items meant its average month-end net debt would have been below the £191million over the period – although that was a significant drop from 436 million last time after its capital raise and the sale of its Kier Living housing arm last year.
Group revenue in the period fell 8% to £1.5bn, but pre-tax profit rose 41% to £12.7m.
Davies added: “These are normal results. We do what we promised to do. Operating profit fell 12% to £25m.