Trading Statement

Kier Group PLC
15 July 2004



                                 KIER GROUP PLC

                        TRADING UPDATE AND BOARD CHANGES
                            YEAR ENDED 30 JUNE 2004

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 institutions today.

Current trading

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

The construction market remains buoyant with both public and private sector
investment continuing to provide us with ample opportunity, allowing us to be
selective. Our Regional businesses secured a record level of awards during the
year with negotiated and partnered work continuing to enhance the quality and
strength of our order books. Cash generation within the Regional contracting
business remained strong during the year.

Support Services continues to grow, benefiting from a full year of turnover from
the building maintenance contract with Sheffield City Council which has recently
selected us as one of its preferred contractors under its Decent Homes
initiative. There have been fewer opportunities for local authority outsourcing
contracts than anticipated; however we are pleased to have been selected as
preferred bidder on two housing repairs and maintenance contracts for Leeds
South and Leeds North West with a combined value of £10m per annum for five
years, extendable for a further five years.

The level of housing reservations was higher than expected during most of the
second half of the year, reflecting the strength of the markets in which we
operate, with the normal seasonal slow-down in recent weeks. Legal completions
for the 12 months to 30 June 2004 totalled 1,158, 17% ahead of last year at
average selling prices of £186,300 (30 June 2003: 181,900). The forward order
book at 30 June 2004 of £95.8m is 70% ahead of last year reflecting both the
strength of the market and an increase in the number of outlets. Although the
market for land has continued to be competitive we have achieved our aim of
increasing the land bank from the half-year position to over four years' supply
through a number of selective acquisitions. Whilst we anticipate the market
returning to lower levels of sales price inflation over the forthcoming year our
continued conservative approach to sales income when assessing the viability of
land for acquisition, provides us with a land bank which will stand us in good
stead for the future.

Our property business continues to benefit from a large number of high-quality
opportunities across our sectors. Good progress has been made on our development
at Whitehall consequently the advanced cash received on the sale has reduced
significantly. A similarly structured sale has just been completed for a head
quarters office development in Swindon pre-let to the National Trust. The sale
has been achieved prior to completion of the construction, by Kier Regional,
bringing in £18m of cash to Kier on 14 July 2004. During the year to 30 June
2004 our joint venture company completed the advanced sale of a major office
development in Frimley, pre-let to a subsidiary of BAE, bringing in over £37m of
cash to the joint venture account ahead of construction.

Our PFI business has had a successful year having achieved financial close on
three projects during the last four months with a combined capital value of
£83m, all being constructed and serviced in-house. We were also very pleased to
secure the position of preferred bidder on a further schools project in
Sheffield which will provide Kier Regional with a £50m construction contract and
Caxton with a 25 year support services contract on completion of the
construction.

Kier remains well positioned in all our markets and prospects are good for the
future.

Board changes

In accordance with our succession plans, Colin Busby, who reached his retirement
age of 60 in June 2004, has decided to step down as Chairman and retire from the
Board at the Company's Annual General Meeting in November 2004. Colin, who
joined Kier in 1969, led the employee buy-out of the Group in 1992 and has been
instrumental in shaping the business in subsequent years. His contribution is
greatly appreciated by his colleagues on the Board. Colin will be succeeded by
non-executive director, Peter Warry, who joined the Board in June 1998. Peter,
aged 54, is also Chairman of Victrex PLC and of BSS Group PLC.

Kier Group expects to announce its preliminary results for the year to 30 June
2004 on 16 September 2004.


For further information, please contact:

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

John Coles
Sarah Landgrebe
Bell Pottinger Corporate & Financial   Tel:[phone]



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