Dod101 wrote:It is surely also significant that they say re debt that
'Going forward, Kier will focus on managing its retained businesses to deliver long-term profits and a sustained reduction in the Group's underlying debt levels rather than targeting lower debt positions at reporting dates.'
In other words they have been manipulating debt levels to ensure that they look better than they actually are on the reporting dates. Balance Sheet numbers are only a moment in time.
Dod101 wrote:I am not saying that but for all I know that may have come into it but what I am saying is (and it is actually what they have admitted in today's announcement) they targeted, that is deliberately tried, to report lower debt positions at reporting dates. That would suggest that they wanted to reassure the market and possibly their lenders that the average debt was lower than it actually was. Kidology I am afraid, and it tends to be found out. I would have been fired in my company had I tried that, but here was the top management actively trying to deceive the public investors (and possibly their lenders for all I know)
No, they have not actually admitted
that they tried to report lower debt positions at reporting dates - the passage you quote from the RNS only says that they are changing their target. That could be for as little reason as that their review has identified the potential
in the old target for that type of balance sheet manipulation and is taking pre-emptive action to avoid it, and there are also intermediate possibilities such as that those who set the old target failed to understand how great a temptation it would produce to manipulate the balance sheet - a somewhat grey area about how deliberate it was.
Of course, "innocent until proved guilty" is not
a sensible criterion to apply to investment decisions, and in such cases, it is very reasonable to base one's investment decisions on strong suspicions of bad behaviour even when it's not actually admitted to or otherwise proved to have happened. In this case, the bit of the RNS you quote would certainly count as such a case in my view, and so I will make my investment decisions about Kier as though
they had admitted to trying to report lower debt positions at reporting dates in the past. But I won't allow myself to get muddled about the fact of whether they actually have admitted to it: they haven't.