According to analysts, Kier’s plan to raise between £ 190m and £ 240m in new shares announced this morning has more credibility than it did when the company issued new shares last time in 2018, according to analysts. Kier implemented its latest capital increase in November 2018 when it announced plans to issue £ 264m in new shares. The move was poorly received, as the company’s price fell more than 30% on news and investors’ acquisition of new shares. The episode contributed to the departure of former CEO Hayden Morsell. The market response to this morning’s announcement, which came along with the company’s half-year results, was muted, with Kier’s share price down nearly 2 percent at midday. The difference between the latest capital increase and 2018 efforts is that the company was able to enter the market with more credibility, said Nomis analyst Johnny Cupro. “They did not throw everything on the shareholders to collect the full amount,” he said. “Management has gone through a very difficult process, but very effective processes, of taking costs and getting rid of certain parts. I think what that does is it gives a certain level of credibility to what they’re doing now, because they’ve shown progress.” The company confirmed on Friday that it had agreed to a deal to sell its Kier Living homebuilding business for £ 110m. Cupro added that CARE’s management has been “very honest” with shareholders since Davis took charge in early 2019 about what needs to happen to fix the company’s finances. He said, “You have to give the credit to the management, they have provided what they said they would do in terms of streamlining the group and they constantly upgraded their cost saving guidelines.” The company has warned that new shares may be needed to fix its balance sheet since last year. More details about the capital increase will be announced in the coming weeks. The company aims to return to a net cash position in the next two years, Kier’s management told analysts today. It reported an average net debt at the end of the month of £ 436m for its most recent half year. Kier CEO Andrew Davies told CN this morning that the company’s operating cash flow, combined with liquidity-raising measures, will help Kier achieve his return to a net cash position. Progressive equity analyst Aleister Stewart has raised concerns about the latest numbers from Kier’s construction division and broader industry trends, which may reduce cash flow. “The most cash-generating part of the group, the construction, saw a drop in the order book. Meanwhile, the outlook for working capital patterns across the industry at the moment appears uncertain due to the government’s policy on pay times.” The construction order book decreased from £ 3.6 billion to £ 3.4 billion. Stewart said that Kier’s semi-annual results to December 31, 2020 showed an improvement. “In practice, it appears that the group is now pointing largely in the right direction,” he said. CARE’s adjusted operating margin increased from 2.5 percent in the six months to December 31, 2019 to 2.9 percent in the last six months. The revised figures exclude around £ 71m in extraordinary costs in the last financial year and £ 19m at present. Kopro said the improvement of the base margin between December 2019, when there was no pandemic, until December 2020 was a “very good performance”. “Also, going back to reported earnings and positive free cash flow shows that the shift has worked on an operational basis,” he added.