UPDATE 2-Britain's Kier falls to loss as restructuring costs mount

* Kier reports 341 mln stg in charges

* Sees no growth in buildings business in 2020

* Shares fall as much as 14%

* Chairman Philip Cox to retire (Adds details on results, shares, background)

By Noor Zainab Hussain

Sept 19 (Reuters) - Shares in Kier Group slumped as much as 14% after the British contractor posted an annual loss, as a radical overhaul to cut debt and simplify its structure to dodge the problems that have toppled others in the industry pushed costs higher.

Kier, in the middle of a major revamp under a new boss, reported an operating loss of 217 million pounds ($270.45 million) in the year ended June 30, from a profit of 134 million pounds a year earlier.

The company, which has contracts for London's Crossrail project, also reported 341 million pounds in charges, including the costs of preparing to exit or sell businesses, restructuring costs and significant contract losses.

Kier has also said it would sell its housebuilding and property businesses, cut about 1,200 jobs and suspend its dividend for at least two years in its bid to lower debt and stabilise the business.

It plans to shed its facilities management and environmental services units, leaving it focused on regional building, infrastructure, utilities and highways.

Shares in Kier, which listed in London in 1996, were 4.6% lower at 126 pence at 0744 GMT, a far cry from their peak price of 2,024 pence in 2007. Analysts at Liberum flagged that the sale of Kier's residential unit will take time.

The restructuring plan under CEO Andrew Davies, who took charge in April, came after Kier warned on profit, blaming higher costs and pressures on some businesses. The company also failed last December to convince shareholders to back a rights issue.

Kier has said the growing pessimism among bankers, who were cutting their exposure to the industry after the collapse of rival Carillion, hit its share issue plan.

Davies, who worked with BAE Systems for 28 years in many senior roles, had been due to take over as CEO of Carillion before it collapsed.

Troubled outsourcing company Interserve, one of the British government's biggest contractors, also slipped into administration in March.

FIRM FOUNDATIONS

Net debt at the end of June was 167 million pounds, lower than 186 million pounds a year earlier.

Operating profit before exceptional items fell 34% to 124 million pounds, while its order book stood at 9.4 billion pounds at the end of June, compared to 9.8 billion pounds a year ago, reflecting the sale of its Australian highways business.

"Kier experienced a difficult year, resulting in a disappointing financial performance. However, we are building firm foundations for the future," Davies said.

Kier, whose second biggest shareholder is under-fire British asset manager Neil Woodford, said it did not expect revenue in its buildings business to grow in the current financial year, as Brexit jitters could lead to delays in decision-making by clients.

Kier also said separately that its chairman, Philip Cox, would retire once a successor has been appointed.

($1 = 0.8024 pounds) (Reporting by Noor Zainab Hussain and Justin George Varghese in Bengaluru Editing by Saumyadeb Chakrabarty and Emelia Sithole-Matarise)