Kier boss given marching orders after fudged fundraising

While the struggling construction company raised £250m in a rights issue in December, just 38% of its shareholders took up the discounted shares it sold in the deal, leaving its banks and brokers left holding about £100m worth, which they soon sold on.

Recent reports had suggested major shareholder Neil Woodford was pushing for changes at the top, with other big investors said to be of a similar mind.

Chairman, Philip Cox, has been asked by the board to act as executive chairman and oversee the company's operations until a new external successor to Mursell has been found.

"The board believes that, following the completion of the recent rights issue, now is the right time for a new leader to take Kier forward to the next stage of its development. The board would like to thank Haydn for his contribution during eight years on the board, firstly as finance director and then as chief executive. On behalf of the board, I would like to wish him every success in the future," said Cox.

Meanwhile, the company released a trading update that said that it had reduced net debt to roughly £130m, with its average month-end net debt to £370m, down from £410m in the second half of last year, thanks to the right issue.

New contract wins in infrastructure services and building businesses has given Kier a forward orders book worth £10bn. Key contracts won include the renewal of a three-year utility services contract in the south west of England worth approximately £70m, as well as over £500m-worth of regional building projects secured during November and December.

Consequently, the company remains confident in full-year expectations for the year ended 30 June and has 100% visibility of the forecast revenue.

Analysts from Liberum said they now expected a 70% second half weighting of profit before tax, "slightly higher than the ‘normal’ 62%", and estimated that first-half profit before tax will increase by 10% to £53.7m, though this increase will likely be mitigated by initial £10m costs from Kier's 'Future Proofing' programme.

Russ Mould, investment director at AJ Bell, said Mursell's fundraising "may not have been an unqualified success, to put it mildly, but at least the company’s fundraise has put the company on a surer footing financially. Mursell could also take some comfort that he is not leaving the company after a profit warning”.

Kier Group's shares were up 0.67% at 527.00p at 0902 GMT.