Interim Management Statement

RNS Number : 7719H

Kier Group PLC

10 November 2008

 



                    10 November 2008

KIER GROUP plc

INTERIM MANAGEMENT STATEMENT AND AGM STATEMENT

This statement covers the period from 1 July 2008 to the date of this announcement and constitutes Kier's Interim Management Statement as required by the UK Listing Authority's Disclosure and Transparency Rules.

Kier Group plc, the construction, support services, housebuilding and property development group, held its Annual General Meeting at the Group's head office at Sandy, Bedfordshire on Saturday, 8 November 2008 at 11.00am where the following comments were made regarding current trading, financial performance and the outlook for the financial year.  

"We are pleased to report that the Group has made a good start to the new financial year with first quarter trading in line with our expectations. 

"Our Construction division has made a strong start to the new financial year with a high level of revenue achieved in the first quarter. The markets in which we operate are, however, mixed. Private sector expenditure is clearly slowing in the commercial property market however this is compensated for by continued public sector expenditure, particularly in education which accounts for approximately 50% of our regional tender activity to date. Our order books and pipeline of opportunities at preferred bidder stage remain at healthy levels securing over 90% of our expected revenue for the year. 

“We were delighted to have achieved financial close on a Building Schools for the Future project for Kent County Council in October which has secured us £110m worth of education work with the potential for a further £150m in future waves. We are also pleased to have been recently announced as preferred bidder on four academies in Cumbria totalling approximately £90m and a £32m student accommodation project at Luton. Following on from our success in securing a £100m CCGT power station in West Burton for EDF Energy in August 2008 we are pursuing further major opportunities in the energy and waste sectors which, together with a number of other civil engineering opportunities, will provide growth for our infrastructure and overseas business this year.

"In Support Services we have good long-term visibility of revenues through our Building Maintenance division where we operate a number of large, long-term contracts for the repairs and maintenance of social housing units. We continue to pursue further opportunities including a £40m per annum contract for North Tyneside for ten years extendable to 15 where we are shortlisted as one of two bidders. We have also been awarded an £11m per annum contract for Surrey County Council to carry out maintenance and minor capital works on public buildings for two years extendable for a further two years.

“Our Homes division, which now includes Kier Homes, our private residential business, as well as Kier Partnership Homes, our social housing contracting business, has made a satisfactory start to the year. Despite further deterioration in buyer sentiment and a lack of liquidity in the mortgage lending market unit sales in Kier Homes are in line with our target for the year. Our order book of reserved and exchanged units at 31 October is 60% below the same period last year and, together with completions to date, represents around 55% of our full year targeted unit sales. Selling prices have continued to fall and, on average, prices across our locations and product range have fallen by some 10% - 15% from their peak. This is less than reported in some areas largely due to our lack of exposure to high-rise city centre apartments. Our housing work-in-progress remains higher than we would like but a number of our sites are being actively re-planned for social housing and other alternative uses reflecting our change in focus away from speculative housebuilding.

“In our Property division, activity continues on a number of developments despite the general lack of liquidity and occupier demand in the market. Good progress is being made on our Supreme Court development for the Ministry of Justice which we are funding on our balance sheet with a view to selling the development in due course. We are also exploring other potential development sales this year mainly to overseas investors. Our new joint venture with Network Rail has made a strong start with additional stations being incorporated within the portfolio.

"The Group's financial performance to date is in line with our expectations; cash is strong and we have healthy order books in Construction and Support Services. Barring any further significant setbacks in our markets we are on track to meet our expectations this year."

- ENDS -

For further information, please contact:

John Dodds, Chief Executive

Deena Mattar, Finance Director

Kier Group plc                                           Tel: [phone]

Caroline Sturdy/Matthew Moth

Madano Partnership                                  Tel: [phone]

 

END

 

 

IMSBLBBTMMAMTLP