AGM Statement

Kier Group PLC 01 December 2003 1 December 2003 KIER GROUP plc AGM STATEMENT Kier Group plc, the major construction, support services, housebuilding and property group, held its Annual General Meeting at the Group's head office at Sandy, Bedfordshire on Saturday, 29 November 2003 at 11.00am. John Dodds, Chief Executive, commented on the strong performance achieved by the Group in its financial year to 30 June 2003 and went on to say that the Group had made a good start to the new financial year with performance to date in line with market expectations and order books in Construction & Services and Homes & Property at healthy levels. He made the following comments: Kier's record of profits growth has continued for 11 years; the strong performance in 2003 being supported by excellent cash generation, strengthening of the balance sheet and, once again, a 40% return on shareholders' funds. Growth was achieved across all business segments underpinned by the mechanics of our business model with investment in our asset based businesses driven by the cash generated by the Construction businesses. The construction market continues to be underpinned by Government spending, particularly in the health and education sectors. Within Regional Construction, orders to date are at healthy levels and enquiries are plentiful indicating further growth in turnover this year. In National Construction, the plan to reduce risk through being more selective has, as expected, resulted in a smaller order book. A number of good opportunities are being pursued in the Support Services division. The programme to improve the Construction & Services margin continues. Kier Partnership Homes, which incurred significant losses last year, is now on budget and Regional Construction has continued its strong profit and cash performance. The two contracts within National Construction, on which we reported losses last year, are coming to an end; the retail project in Bournemouth is now complete and the head quarters for TAG McLaren in Woking will be completed before Christmas 2003. The international business continues to trade well and will make a good contribution to Construction profits again this year. Support Services continues to trade in line with expectations with the £640m contract for Sheffield City Council performing well. In Housebuilding demand for our products has been maintained in all of our markets. Our unit completions and current forward order book, together, are 10% ahead of last year, securing over 70% of our projected unit sales for the current year. The economic fundamentals continue to be favourable; interest rates and unemployment remain low and the delays in planning continue to ensure that the demand for housing outstrips supply. We anticipate further modest increases in interest rates over the coming year but do not believe that demand will dampen significantly. In Property a number of sales have taken place since 1st July 2003 securing our half-year targets. Good progress is being made on the office development at Whitehall and a number of opportunities are being progressed with approximately 400,000sq ft of pre-let office space expected to be agreed during the first half of this financial year. Kier's businesses are in good shape and all of our markets are sound. We believe that prospects are good for further growth this year and beyond. Enquiries to: John Dodds, Chief Executive Kier Group plc Tel: 01767 640111 Caroline Sturdy/Bella Jowett Bell Pottinger Financial Tel: 020 7861 3232 This information is provided by RNS The company news service from the London Stock Exchange

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Kier Group (KIE)
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