Trading Statement

Kier Group PLC
18 July 2002



                                 KIER GROUP PLC

                                 TRADING UPDATE

                            YEAR ENDED 30 JUNE 2002

Kier Group plc, the contracting, services, house-building and property group, is
pleased to provide the following update to current trading in advance of the
announcement of its results for the year ended 30 June 2002, currently scheduled
for 18 September 2002.

Current Trading

The Board is pleased to confirm that the year ended 30 June 2002 has been a busy
and successful one for Kier and that the Group's businesses have traded well
throughout the second half of the year and in line with expectations.

In construction the current order book remains full with the markets continuing
to provide us with opportunities whilst allowing us to remain selective. This
has enabled a steady growth in UK turnover to be achieved together with an
increase in market share. Our overseas business has performed strongly in the
second half of the year benefiting from the prudence applied in providing for
losses in previous years.

In line with our strategy to grow the services side of the business, we were
awarded a £20m contract for the London Borough of Greenwich under the
Government's "best value" programme to be carried out over five years. We are
also pleased to have been selected as one of two bidders on a similar, but
larger, contract in Sheffield.

Demand for our homes during the year has remained strong resulting in an
increase in legal completions from 733 last year to 877 this year. The forward
order book at 30 June 2002, of £54m, is 170% ahead of the previous year
providing an encouraging start to 2003. Allison Homes, which we acquired in
September 2001, has contributed well to the performance of the division.

In April we announced an investment in a joint venture to acquire the shares in
Laing Property Developments. Good progress is being made in advancing the
development opportunities contained within the portfolio. As stated at the time
of the transaction we do not expect the investment to have a material impact on
our results for the year.

With regard to infrastructure investments contracted through special purpose
vehicle companies, accounting practices continue to be examined. In response to
this, in May 2002, the Urgent Issues Task Force published Abstract 34
"Pre-contract costs". In the past Kier has written off the costs of bidding on
PFI projects as they were incurred. Subsequently, on financial close, the Group
recovered external bidding costs from the special purpose vehicles in cash and
consequently reflected that recovery in the financial period in which financial
close took place. In view of this prudent approach, the effect of the adoption
of UITF 34 on the Group's results for the year ended 30 June 2002 will be
insignificant and an adjustment to prior year results is not anticipated.

Looking ahead, prospects for our major markets remain encouraging and the Group
continues to be on track to make further progress in 2003.



                                    - ENDS -



Enquiries:

Colin Busby          Chairman, Kier Group           Tel: [phone]

Deena Mattar         Finance Director, Kier Group   Tel: [phone]

Caroline Sturdy      Bell Pottinger Financial       Tel: [phone]



                      This information is provided by RNS
            The company news service from the London Stock Exchange