Trading Update

Kier Group PLC
07 July 2003




7 July 2003


                                 KIER GROUP PLC

                                 TRADING UPDATE

                            YEAR ENDED 30 JUNE 2003



Kier Group plc, the contracting, services, housebuilding 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 2003, currently scheduled
for 17 September 2003.

Current Trading

Overall, based on current performance, Kier Group expects to report full year
profits ahead of last year and in line with market expectations.

Within our Regional construction business order books remain full with the
market providing plenty of opportunities. The business continues to show steady
growth with an excellent trading and cash performance. The process of
implementing and embedding controls within the Partnerships First business (the
social housing business acquired by Kier Regional in November 2002) has revealed
a number of small contract losses against which provisions have been taken. This
business has been restructured and, in its new form, is expected to benefit from
proposed Government spending on social housing.

In Kier National, our major projects division, the overseas business has
continued to perform well and has exceeded expectation with a particularly
strong performance from our operations in the Caribbean and the Middle East. The
programme to downsize and restructure the UK major projects business, as
indicated in the interim statement, is well advanced. The division is expected
to make a modest loss in the year to June 2003 largely attributable to two
projects within the UK building business on which a cautious position has been
taken.

We were delighted to achieve financial close in April 2003 on the £640m
outsourcing contract for Sheffield City Council in our Support Services division
and are pleased to report that it is trading in line with expectations.

The housebuilding division has had another good year with an increase in legal
completions from 877 last year to 990 this year. Average selling prices and
margins have increased providing a strong result in the second half of the year.
The forward order book at 30 June 2003 is £56m compared with £54m at the
previous year end.

Good progress is being made on the Whitehall development, the sale of which was
secured by Kier Property in December 2002. Our property joint venture with the
Bank of Scotland is also performing well and is providing a good contribution
sooner than anticipated.


Our markets remain stable and there is confidence that progress will continue in
all of our businesses into 2004 and beyond.

                                    - ENDS -


Enquiries:

John Dodds, Chief Executive
Deena Mattar, Finance Director
Kier Group
Tel: [phone]


Caroline Sturdy/Bella Jowett
Bell Pottinger Financial
Tel: [phone]






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