Trading Update

RNS Number : 8568C
Kier Group PLC
25 January 2018
 

25 January 2018

 

KIER GROUP PLC

TRADING UPDATE

 

Kier Group plc, a leading property, residential, construction and services group, announces its trading update for the six months ended 31 December 2017, prior to announcing its results for the period on 15 March 2018.

 

The Group has traded in line with management's expectations in the period and has concluded its two-year portfolio simplification programme, in line with previous guidance. The Property and Residential divisions are delivering on their ROCE targets and operating margins have been maintained in the Construction and Services divisions.

 

As anticipated, investment in Property and Residential led to an increase in average net debt during the period. Capital employed in these divisions is now at the target level for the purposes of Vision 2020 targets. We therefore expect net debt to EBITDA to be less than 1x at 30 June 2018 and for the Group's year-end and average net debt position to reduce over the period to 2020.

 

The Group's net debt position for the six months ended 31 December 2017 will be in the range of £230m-£240m (31 December 2016: £179m), including the £24m cost and acquired debt of McNicholas, with an average month-end net debt position for the period of c.£350m (31 December 2016: £300m). The Group's net debt position is underpinned by our Property and Residential assets of c.£500m.

 

The combined Construction and Services order books remain strong at c.£9.5bn, with 100% of forecast revenue for the 2018 financial year secured, providing good visibility. In addition, our Highways business is currently in negotiation with Highways England for three-year extensions to its Area 3 and 9 contracts, with a final decision expected by the end of March 2018. The McNicholas acquisition is performing well and provides a highly complementary addition to our utilities services business, as highlighted in our recent contracts announcement.

 

Following our announcement on 15 January, Kier and Eiffage have taken over responsibility for the HS2 joint venture and Kier is assuming full responsibility for the Highways England smart motorways schemes on which it has been working in joint venture with Carillion. The above contracts are all performing well, operationally and financially.

 

Haydn Mursell, chief executive, said: "Our first half performance continues to demonstrate the strength and stability of the business and the benefits of our client focused strategy. We have leading market positions in infrastructure services, building and development which provide the platform to support further growth and position the Group well for the future. The Group remains on course to deliver double digit profit growth in the current year and to achieve its Vision 2020 targets."

 

- ENDS -

 

Trading update call

 

There will be an analyst/investor call at 08:00 on 25 January 2018. Dial in details are:

Dial in number(s)

United Kingdom Toll-Free: 0800 358 9473 PIN: 60378837#
United Kingdom Toll: +44 (0) 333 300 0804 PIN: 60378837#

URL for international

dial in numbers

http://events.arkadin.com/ev/docs/NE_W2_TF_Events_International_Access_List.pdf

A replay of the conference all will be available for 90 days:

 

Dial in number(s)

United Kingdom Toll-Free: 0800 358 2049 PIN: 301218112#
United Kingdom Toll: +44 (0) 333 300 0819 PIN: 301218112#

 

For further information, please contact: 


 

Louise Turner-Smith, Kier investor relations 

+44 (0)7976 790012

 

Kier press office 

+44 (0)1767 355903

 

Richard Mountain/Nick Hasell, FTI Consulting 

+44(0)20 3727 1340

 

 

 


 

This announcement does not constitute an offer of securities by Kier Group plc (the "Company"). Nothing in this announcement is intended to be, or intended to be construed as, a profit forecast or a guide as to the performance, financial or otherwise, of the Company or any of its subsidiaries (together, the "Group") whether in the current or any future financial year. This announcement may include statements that are, or may be deemed to be, ''forward-looking statements''. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future and may be beyond the Company's or the Group's ability to control or predict. Forward-looking statements are not guarantees of future performance. You are advised to read the section headed ''Principal risks and uncertainties'' in the Company's Annual Report and Accounts for the year ended 30 June 2017 for a further discussion of the factors that could affect the Company's or the Group's future performance and the industry in which it operates.  Other than in accordance with its legal or regulatory obligations, the Company does not accept any obligation to update or revise publicly any forward-looking statement, whether as a result of new information, future events or otherwise.


This information is provided by RNS
The company news service from the London Stock Exchange
 
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