Update on trading, FPK programme, strategic review
3 June 2019
Kier Group plc
Update on trading, Future Proofing Kier programme and strategic review
Kier Group plc ("Kier" or the "Group") today provides an update on its current trading and outlook for the 2019 financial year ("FY2019"), its Future Proofing Kier programme and the timing of the strategic review announced on 15 April 2019.
Current trading and outlook
As highlighted in Kier's FY2019 interim results, the Group continues to experience volume pressures within its Highways, Utilities and Housing Maintenance businesses. In addition, whilst continuing to perform well with double digit growth in its orderbook during FY2019, the Buildings business' revenue growth for FY2019 will be lower than previously forecast.
As a result, Kier now expects that FY2019 revenue will be broadly in line with the Group's reported revenue for the 2018 financial year and currently expects that the Group's underlying operating profit for FY2019 will be c. £25 million lower than previous expectations and that the Group is likely to report a net debt position as at 30 June 2019, which would have an adverse impact on its FY2019 average month-end net debt position.
Against the background of the revised guidance in respect of FY2019, Kier will provide updated guidance for FY2020 with its FY2019 preliminary results announcement on 19 September 2019.
Future Proofing Kier programme
The net costs associated with the FPK programme for FY2019 are now expected to be c. £15 million higher than previously forecast. In part, this reflects an acceleration of the programme following the appointment of Andrew Davies as Chief Executive. These net costs are in addition to the £25 million reduction in operating profit identified above. Kier will provide a further update on the FPK programme when it announces the conclusions of the strategic review.
Strategic review
On 15 April 2019, Kier announced that Andrew Davies would lead a strategic review of the Group to consider ways of further simplifying it, the allocation of capital resources across the Group and additional steps to improve cash generation and reduce leverage. Kier confirms that the conclusions of this review will be announced on 30 July 2019.
This announcement contains inside information for the purposes of Market Abuse Regulation (Regulation (EU) No. 596/2014). The person responsible for making this announcement on behalf of the Company is Hugh Raven, General Counsel and Company Secretary.
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For further information, please contact:
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Kier press office |
+44 (0)1767 355096 |
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Richard Mountain/Nick Hasell, FTI Consulting |
+44 (0)20 3727 1340
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This announcement does not constitute an offer of securities by Kier Group plc (the "Company" and, together with its subsidiaries, the "Group"). 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 2018 and the section of the Company's rights issue prospectus dated 30 November 2018 entitled "Risk factors" 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 news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
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