Kier Group, a London-listed construction firm, has announced its exit from the UK's residential property sector. The FTSE 250 company informed shareholders on Tuesday that it is withdrawing all capital from housing to "de-risk" its portfolio.
The decision follows a slump in demand for new homes across the country. Kier's pre-tax profit from its property division decreased by a quarter to £9.1m in the year to June, attributed to a "challenging backdrop" and "macro-economic turbulence."
Kier will now concentrate its efforts on government infrastructure partnerships. The firm stated that its core businesses are aligned with government and regulated industry spending commitments on UK infrastructure, expecting "significant revenue growth" from water, energy, defence, and healthcare projects in the coming years.
Separately, MJ Gleeson, another London-listed firm, reported a pre-tax loss of £2.7m in the year to June and cut its dividend. This highlights the "subdued" environment facing companies in the housing sector, which has seen UK house prices fall in the year to August, marking the first annual drop in nearly three years.