AGM Trading Update

RNS Number : 7705W

Kier Group PLC

17 November 2017

 

For announcement 0700 hours on 17 November 2017

KIER GROUP PLC

AGM TRADING UPDATE

Kier Group plc, the property, residential, construction and services group, announces its trading update covering the period since 28 June, prior to its Annual General Meeting at 12 noon today.

Current trading and operational update

The Group has traded in line with the Board's expectations in the period.

Property

The Property division is performing well, delivering a return on capital (ROCE) in excess of 20% on an increasing capital base. During the period, we continued to invest in new development sites and experienced strong co-investor support, all of which contributed to the development pipeline remaining in excess of £1.4bn.

Residential

The mixed tenure and private housebuilding businesses continue to make good progress. ROCE has increased, benefiting from the recycling of capital from our private land bank into the mixed tenure business and the increasing use of joint ventures. Private sales and pricing remain strong and demand for mixed tenure housing continues, further assisted by recent Government initiatives including the extension of the Help to Buy scheme.

Construction

The performance of this division is underpinned by the regional building business and is delivering margins in line with the Board's expectations. The Group was pleased to be awarded the maximum number of places on the Education and Skills Funding Agency's latest £8bn four-year construction framework, reinforcing the Group's position as a leading provider in the education sector.  The current order book represents more than 95% of the division's targeted revenue for this financial year. During the period, we agreed the final account for the last MTR contract in Hong Kong and we are in the process of handing over the final elements of work on our remaining project in the Caribbean.

Services

The Services division continues to deliver with consistent margins and has a current order book representing more than 95% of its targeted revenue for this financial year. A new seven-year highways maintenance contract with Shropshire County Council, worth £147m, has been secured complementing the Group's existing presence in the region. Our Highways England programme of works remains on track following the publication of the Highways England road improvement programme. Moving forward, we believe that we are well placed to benefit from new opportunities arising in the UK highways market.

Following its acquisition, the McNicholas business is performing well and good progress is being made with its integration.

Financial position

Following ongoing investment in the property and residential divisions and the acquisition of McNicholas, the Group's average net debt position has increased in the period in line with the Board's expectations.  We continue to drive strong operational cash conversion which supports increased investment in the Property and Residential divisions. In line with our Vision 2020 targets, we expect to maintain a net debt to EBITDA ratio of less than 1x at 30 June 2018.

Outlook

The Group remains on course to deliver double digit profit growth in the current year and achieve its Vision 2020 targets.

- ENDS -

For further information, please contact:
Louise Turner-Smith, Kier investor relations	[phone]
Kier press office	[phone]
Richard Mountain/Nick Hasell, FTI Consulting	[phone]

This announcement does not constitute an offer of securities by Kier Group plc (the "Company"). Nothing in this announcement is intended to be, or intended to be construed as, a profit forecast or a guide as to the performance, financial or otherwise, of the Company or any of its subsidiaries (together, the "Group") whether in the current or any future financial year. This announcement may include statements that are, or may be deemed to be, ''forward-looking statements''. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future and may be beyond the Company's or the Group's ability to control or predict. Forward-looking statements are not guarantees of future performance. You are advised to read the section headed ''Principal risks and uncertainties'' in the Company's Annual Report and Accounts for the year ended 30 June 2017 for a further discussion of the factors that could affect the Company's or the Group's future performance and the industry in which it operates.  Other than in accordance with its legal or regulatory obligations, the Company does not accept any obligation to update or revise publicly any forward-looking statement, whether as a result of new information, future events or otherwise.

 

END

 

 

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