Trading Statement

Kier Group PLC
03 July 2006

                                                                     3 July 2006



                                 KIER GROUP PLC
                                 TRADING UPDATE
                            YEAR ENDED 30 JUNE 2006

Kier Group plc, the contracting, services, housebuilding and property group is
pleased to provide the following update to current trading in advance of a site
visit with analysts and institutional investors tomorrow.

Kier Group plc expects to report full year profits well ahead of last year and
at the higher end of market expectations.

Cash generation during the year has been very strong despite the 'special'
contribution of £31.5m made by the Group by the end of June 2006 to its pension
scheme. The Group's strong cash position largely reflects excellent cash
generation in the Construction division.

In Regional construction the value of awards for the year has been at the
highest level ever resulting in a record order book brought forward into the new
financial year. Approximately half of our awards are now from the public sector,
particularly education, and a high proportion of the total awards have been
negotiated or partnered.

Support Services has made excellent progress this year, particularly in the
Building Maintenance division where our local authority outsourcing contracts
are performing well.  We continue to see further opportunities emerging from
this market and we are well placed to take advantage of these as they arise.

In Housing we have seen a changed pattern to the timing of unit sales with a
greater bias towards the second half of this financial year than last.  Overall
we achieved 1,522 completions for the year representing a 25% increase over last
year.  Reservation levels remained strong in the period from March to the middle
of June and, although we have experienced some seasonal slowing of the market
towards the end of June, we enter the new financial year with a substantial
brought forward order book containing more than a quarter of next years'
projected unit completions.

Our Property business continues to benefit from a strong property market and
from opportunities across all sectors including mixed-use and regeneration
schemes.  As our reputation for tackling complex development sites continues to
grow we are increasingly being approached by clients for solutions to such
sites.

Our PFI business continues to grow with financial close reached on two further
schools projects and a health project during the year.

The Group is in good shape. All of our markets are healthy and there is
confidence in all of our businesses that progress will continue into the new
financial year and beyond.

Kier Group expects to announce its Preliminary results for the year to 30 June
2006 on 14 September 2006.

                                    - ENDS -

For further information, please contact:

John Dodds, Chief Executive
Kier Group plc                           Tel: [phone]

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

Caroline Sturdy
Madano Partnership                       Tel: [phone]


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