Interim Management Statement

RNS Number : 0688S

Kier Group PLC

15 November 2011

 



IMS 15 Nov 2011

KIER GROUP PLC

INTERIM MANAGEMENT STATEMENT

Kier Group plc announces today its Interim Management Statement covering the period from 1 July 2011 to the date of this announcement.

Current trading

Kier, the integrated construction, services and property group, remains on course to meet its expectations for the current financial year, despite the increasingly challenging environment.

Construction

Our Construction division has continued to be resilient and traded as previously forecast, benefitting from our breadth of capabilities and positioning on more than 70 frameworks and from our collaborative approach to bidding. We have maintained Construction operating margins firmly above 2%, in line with previous guidance.

Having secured more than £400m of new work in the period, our order book of secured and probable work represents 96% of our forecast Construction revenue for the year to 30 June 2012 and 55% of our forecast Construction revenue for the year to 30 June 2013.

As anticipated, our contract awards continue to demonstrate a shift towards the private sector although education remains a very significant contributor and we have seen some growth in the number of awards in health projects through the P21+ framework. Developments in the power, waste and overseas markets have remained positive and we expect these to generate good quality work for us in the short to medium term.

Services

The Services division is trading as we had predicted and our order book continues to provide long-term visibility of revenues, underlining our confidence in the sustainability of our 4.5% operating margin.

We are experiencing a marked increase in the number of tender opportunities across both the public and private sectors although the market remains competitive. This, together with our successful appointment to the £750m SCAPE national minor works framework as sole contractor during September, is expected to translate into growth in revenues over the next few years.

Property

Our Property division's results for the 2012 financial year will highlight its increasing importance to the Group; however, the division's transactions are weighted towards the second half of the current financial year, and we would expect our cash position to reflect this.

In our Homes business, we maintain our focus on the development of mixed-tenure affordable housing and we continue to pursue the strategy of reducing our cash investment by developing and/or disposing of our existing land bank.  We are pleased to announce that we have completed on a further £8m of land sales during the period on deferred terms, bringing the total since the beginning of the calendar year to £28m, and our affordable housing and regeneration businesses are now preferred bidder on the £70m regeneration of Derby Hospital and the £40m Tavy Bridge project in Thamesmead.

New Non-Executive Director

As announced separately today, we are delighted that Amanda Mellor will be joining the Board with effect from 1 December 2011. Amanda, who is currently the Group Secretary and Head of Corporate Governance at Marks and Spencer Group plc, will bring valuable experience and skills to the Board and we look forward to working with her.

Outlook

The Group's trading performance remains in line with our expectations. In particular, our order books in Construction and Services remain robust and our net cash position remains healthy.

In addition to our strong balance sheet, our integrated business model continues to provide a good breadth of opportunities and, with our excellent track record of delivery, we anticipate a trading performance in line with our expectations for the current financial year.

Ends

Kier is tomorrow holding its Annual General Meeting at the Brewery, Chiswell Street in London at 12.00 noon.

 

END

 

 

IMSDKQDNABDDKDD