Trading Update

RNS Number : 0135G

Kier Group PLC

25 June 2012

 



KIER GROUP PLC

TRADING UPDATE

25 June 2012

Kier Group plc, the integrated construction, services and property group, is pleased to provide the following update on current trading in advance of today's analyst and investor visit in London.

Current trading

Trading remains in line with the Interim Management Statement issued on 17 May 2012 (IMS) with our order books for Construction and Services remaining robust and cash balances sustained at healthy levels.

Construction

Trading continues to be resilient with current operating margins above 2%. Our order book of secured and probable work represents 85% of our forecast Construction revenue for the 2013 financial year and the level of tender activity remains high across a range of public and private sector projects. These include new health frameworks across Wales and Scotland, in excess of £1.5bn of infrastructure schemes that we are bidding in the UK and significant activity in Hong Kong and the Middle East. The long awaited Priority Schools Building Programme (PSBP) to design and build educational facilities in England, has recently been confirmed, with the first £400m of projects now announced and being delivered through the Academies (II) Framework of which Kier is a member.

Services

Trading is in line with expectations, and since the IMS, the division has achieved several contract wins that underpin its £2bn order book. As announced on 30 May 2012, the division has been appointed as the preferred bidder on three contracts with a total value of approximately £225m, which includes the five-year planned maintenance services contract for the housing group Circle and two five-year facilities management contracts for Hampshire County Council and Surrey County Council. In addition, the division has secured a maintenance contract for London Fire Brigade and facilities management contracts for Westminster Kingsway College and the Royal Automobile Club, with a combined value of approximately £30m.

Property

Property continues to provide good quality work to our other divisions and is trading well and in line with expectations. We have recently been confirmed as preferred bidder for the £50m PFI project to design, build and maintain 11 fire stations across the county for Staffordshire Fire and Rescue Service, which follows closely behind the £60m PFI project to provide similar facilities for the London Fire Brigade, announced in April. We have also started working on site at Sydenham on a fully pre-let retail park, valued at £58m. Following a number of successes this year, Property now has a development pipeline valued at approximately £750m. Our mixed-tenure housing business has recently qualified as a member of the Birmingham Municipal Housing Trust Developer Partner Framework, which has been established to deliver new build housing worth £1bn over the next three to four years, and our private housing business also remains on track to deliver in excessof 600 completions this year.

Analyst and investor visit

The two areas of focus for today's visit will be our infrastructure business, particularly our involvement in London's Crossrail project, and our Property business. The presentations by senior management will demonstrate Kier's ability to deliver large, highly complex infrastructure projects and the breadth of our property services, highlighting the opportunities in these important sectors and the strength of our integrated business model. During the visit, any comments on trading will be consistent with the IMS and this announcement.

Outlook

The Group's trading performance remains in line with expectations. We have robust order books and a healthy cash position which, combined with our integrated business model, strong customer relationships and great people, positions the business well and enables us to maintain our progressive dividend policy, pursue our chosen growth markets and seek investment opportunities.

Contacts

Paul Sheffield, Chief Executive, Kier Group                                 01767 640 111

Faeth Birch, RLM Finsbury                                                       020 7251 3801

 

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