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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Kier Group Plc | LSE:KIE | London | Ordinary Share | GB0004915632 | ORD 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 3.00 | 2.29% | 133.80 | 133.60 | 134.00 | 135.00 | 131.00 | 133.00 | 255,925 | 10:46:58 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Gen Contractor-oth Residentl | 3.41B | 41.1M | 0.0921 | 14.66 | 602.52M |
From Apr 2019 to Apr 2024
TIDMKIE
RNS Number : 3685T
Kier Group PLC
11 October 2017
11 October 2017
Kier Group plc
Publication of the 2017 Annual Report and the 2017 Notice of Annual General Meeting
Kier Group plc (the "Company") announces that its annual general meeting will be held at the Andaz Hotel, 40 Liverpool Street, London EC2M 7QN at 12 noon on Friday, 17 November 2017.
The Company has today posted, or made available, to shareholders the annual report and accounts for the year ended 30 June 2017 (the "Annual Report"), the notice of annual general meeting and the form of proxy.
These documents are available on the Company's website at www.kier.co.uk/investor-relations and have been submitted to the National Storage Mechanism, where they are available for inspection at www.morningstar.co.uk/uk/NSM.
The Company announced its results for the year ended 30 June 2017 on 21 September 2017. Additional information has been extracted from the Annual Report in unedited full text and is included in the Appendix to this announcement for the purposes of compliance with the Disclosure Guidance and Transparency Rules. Page numbers and note references in the Appendix refer to page numbers in the Annual Report and the notes to the Company's consolidated financial statements for the year ended 30 June 2017 as included in the Annual Report.
For enquiries, please contact:
Beth Melges
Deputy Company Secretary
Tel: +44(0)1767 640 111
The Company's Legal Entity Identifier is 2138002RKCU2OM4Y7O48.
Cautionary statement
This announcement does not constitute an offer of securities by 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 the group of companies of which the Company is the holding company (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". These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "anticipates", "expects", "intends", "plans", "target", "aim", "may", "will", "would", "could" or "should" or, in each case, their negative or other variations or comparable terminology. 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 ability to control or predict. Forward-looking statements are not guarantees of future performance. Important factors that could cause these differences include, but are not limited to, general economic and business conditions, industry trends, competition, changes in government and other regulation, changes in political and economic stability and changes in business strategy or development plans and other risks. 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.
APPIX
Risks
The following information is extracted from pages 37 to 41 (inclusive) of the Annual Report.
Principle risks and uncertainties
The following section sets out the Board's assessment of the principal risks and uncertainties (PRUs) that may impact the delivery of our six strategic priorities, their movement during the year and the relevant controls and mitigations in place. The Board considers these to be the most significant risks facing Kier. Not all risks facing our organisation are listed and risks are not listed in any order of priority.
Hot Features
Premium
Description Key mitigations/controls
---------------------------------------------------------------- -----------------------------------------------------------------
1. Health and safety
Major health and safety
incident
Updated Safety, Health and
The Group's activities Environment (SHE) management
are inherently complex system aligned to the needs
and potentially hazardous of the operational businesses
and require the continuous under a framework of Group
monitoring and management governance.
of health, safety and
environmental risks. Behavioural change programme
The Board has assessed focusing on operational
that this risk remains safety.
high but unchanged from
last year. Failure to Robust major incident response
meet safety standards protocols.
and/or ineffective management
of safety requirements Visible leadership programme
could result in the following: designed to promote a 'safety-first'
culture.
* injury/death to employees, members of the public or
third parties; Revised accident investigation
protocols to ensure robust
investigation and implementation
* reduced ability to bid for and win work; of lessons learnt.
* reputational damage;
* financial penalties arising from fines, claims, legal
action, project delays; and
* failure to meet investor expectations.
---------------------------------------------------------------- -----------------------------------------------------------------
2. Sustainability
Breadth of sustainability
requirements
The Group's commitment to
With the increasing importance sustainability is articulated
of sustainability and within a strategy for a
social value in clients' sustainable business, Responsible
evaluation of contract Business, Positive Outcomes
awards, and the emergence (RBPO).
of greater stakeholder
awareness, progressive The Group operates a management
legislation, and enforcement structure including Board
activity, this risk is committees, and a Corporate
included as a new PRU. Responsibility Leadership
If the Group were unable Group (CRLG) which meets
to meet its sustainability quarterly. Between them
requirements, the following they review the progress
risks may occur: with identified, and emerging,
issues across the areas
* non-compliance with legislation; covered by our strategy
for a sustainable business.
* bid exclusion; Membership of the CRLG is
drawn from our Group services
functions, together with
* reputational damage; representatives from the
operating businesses. It
is responsible for assessing
* failure to meet customer expectations; sustainability risk and
setting appropriate policies
and direction for Kier.
* significant financial penalties/loss of contracts;
and The Group has recognised
that delivering strong performance
across the non-financial
* significant failure to meet investor expectations. focus areas covered by RBPO
helps to create value for
our business, our investors,
our clients and wider society.
For example, improving safety
and wellbeing leads to less
lost time through injury
or illness; improved environmental
performance can reduce waste
of energy and materials,
leading to cost savings;
and choosing the right subcontractors
and supplier partners can
lead to an economic boost
for the community in which
we are operating.
The Group delivers business-wide
training programmes to ensure
its employees are competent
and qualified. We operate
a programme of audits to
review our contracts and
measure performance against
expectations, assessing
and reporting on recommendations
for improvement.
---------------------------------------------------------------- -----------------------------------------------------------------
3. Funding
Availability of funding
The Group has a variety The Group's Investment Committee,
of funding needs met chaired by the Group Financial
by external sources. Controller, is responsible
We have clear metrics for approving capital investment
to measure volatility and optimising the allocation
and sensitivity in the of capital.
key indicators of funding
risk and have recently Cash forecasting and working
undertaken a review which capital management remain
has strengthened our key performance indicators
ability to manage this for the business, with their
risk. The Board assesses ability to generate positive
this PRU as unchanged cash flow demonstrated in
from last year. If this the year.
funding were not available
or curtailed there is The core borrowing facility
a risk that we could was recently renegotiated,
experience: extending tenure and liquidity.
The Group has access to
* failure of business or one stream of the business; committed funding that substantially
exceeds both peak borrowing
and projected funding requirements
* smaller gains or margins; over the next three years.
The average tenure of committed
funding exceeds four years.
* failure to achieve profit expectations;
Availability of bonding
capacity is essential to
* loss of investor confidence; and the Group's ability to win
work. Kier has strong, long-term
relationships with the providers
* reduced cash generation due to reduced volume growth. of this service and has
a dedicated in-house team
to monitor headroom and
advise on bond terms and
conditions.
The Property division uses
a number of joint ventures
to manage risk and enhance
returns. Joint venture partners
are carefully selected to
mitigate operational risk
within projects. By entering
into joint ventures, the
Group can ensure that the
Property division is not
over-exposed to any one
sector, geographical location
or individual development.
---------------------------------------------------------------- -----------------------------------------------------------------
4. Market and sector
performance
Market downturn impacts
customer expenditure The Group regularly evaluates
future market performance
The Group's strategy including the impact of
depends on the economic macro-economic factors (e.g.
performance of the UK, population growth, austerity)
in particular, and the and the associated market
markets and sectors in risk of specific events
which it operates. Kier (e.g. Brexit) together with
has a breadth of capabilities its strategy in those markets.
and operates across a
number of diverse market The Group's strategy is
sectors. The Board has aligned to three core market
extended this PRU (previously segments (buildings, infrastructure
'the market') to reflect and housing) which are underpinned
the importance of our by solid long-term fundamentals
sector decision-making and where the Group is able
and performance, as well to establish a leading market
as the general performance position. The Group's operating
of the economies in which structure is largely aligned
we operate. to these three segments.
Reduced economic activity The Group regularly reviews
and expenditure in public, its business portfolio,
regulated and private which has resulted in exit
sectors would likely from market sectors and
result in lower growth disposals (e.g. Caribbean,
or lower revenue for Mouchel Consulting and Biogen).
the Group. The Group carries out monthly
and quarterly reviews of
Further, investment allocation its secured workload and
across the market sectors prospective pipeline, and
in which the Group operates forecasts its overhead levels
is of clear importance; as a percentage of future
if the Group were to work in order to maintain
invest too heavily in an appropriate ratio of
the wrong sector, the overhead costs to revenue.
following risks would
occur: The Group has well-established
sector sales capability
* failure of business or one stream of the business; in key areas, and during
the year invested in a new
customer relationship management
* reputational impact of inappropriate selections; and system to improve pipeline
visibility.
* failure to meet financial expectations.
---------------------------------------------------------------- -----------------------------------------------------------------
5. Operating model
Operating model inefficiency
To build and sustain We maintain a disciplined
long-term confidence focus on honing the portfolio
we must maintain and by divesting non-core businesses
evolve our operating and making acquisitions
model to maximise growth in line with strategy.
and minimise risk. The
Board has assessed this The Group measures its component
as a new PRU. businesses against a series
of balanced score-cards
Failure to maintain operating throughout the year.
model efficiency could
result in the following As a key part of our control
risks: processes, we challenge
our business units' performance
* failure of business or one stream of the business; and amend plans on a quarterly
basis to ensure that we
are on track to meet investor
* failure to deliver required growth and profitability; expectations.
We constantly strive to
* failure to remain competitive; and anticipate changes within
our business environment
and customer requirements
* failure to meet investor expectations. as well as implementing
efficiencies where appropriate.
The recent enterprise resource
planning (ERP) implementation
and opening of our finance
shared services centre are
prime examples of this.
We have made ongoing investment
in systems to improve our
efficiency and management
information for example,
strengthening back-office
systems through the roll-out
of Oracle ERP and shared
services. These improvements
also enable integrated trading/cross-selling
and scalability of front-line
systems in services businesses,
creating operational efficiencies
and enhancing competitiveness
in certain sectors.
We have implemented a programme
of enhanced customer engagement
to work as closely as possible
with our customers, particularly
where the business environment
is changing, so we can continue
to support them as their
priorities evolve.
---------------------------------------------------------------- -----------------------------------------------------------------
6. Contract management
Ineffective contract
management
The Group maintains a strong
Kier recognises that focus on longer-term service
effective contract management contracts. Potential risks
is at the heart of its are mitigated, controlled
business model and is and managed through the
critical to ongoing success Group's operating structure,
and growth. The Board procedures and standing
has assessed that given orders. Enhanced emphasis
the potential impact and focus on pre-contract
of this risk and current controls has improved the
external factors, this quality of the Group's portfolio
risk has risen in significance of contracts.
since last year and remains
an important focus for Monthly operational and
the Group. financial contract reviews
are held at both business
The Group has a number unit and business stream
of large and complex levels. These reviews are
contracts in play at supplemented by a formal
any given time. Dependent quarterly review process,
on the nature, location which operates across all
and duration of the work divisions of the Group and
and the legal framework is attended by ExCo members.
of the contract, there
is a risk that ineffective The operational and commercial
contract management and functions manage subcontractor
lack of ownership could performance and relationships
result in: across all contracts.
* failure of the business or one stream of the In further mitigation of
business; this risk, the Group's commercial
training programme for all
front line staff has progressed
* financial impact of failure to deliver on contracts; positively. This programme
is designed to ensure a
consistent approach to the
* reputational damage; management of contract risks
across the Group. There
has also been a focus on
* subcontractor performance impact; upgrading key financial
controls across the Group.
These improvements have
* wastage of resources; and had a positive impact on
identifying potentially
under-performing contracts.
* poor management information, reporting, contract data
and transparency.
---------------------------------------------------------------- -----------------------------------------------------------------
7. Customers
Loss of a key customer
relationship
Customer satisfaction surveys
Kier recognises the need are undertaken alongside
to engage effectively independent customer surveys
with customers and strives designed to better understand
to deliver a tailored clients needs and expectations.
service that exceeds
expectations. Given the Each business unit/stream
importance of customer has a dedicated business
satisfaction, the Board development team which participates
has identified this as in a quarterly review of
a new PRU. clients across the UK through
eight regional client forums.
If we fail to deliver
a differentiated customer We have developed key client
experience which focuses plans and relationship mapping
on proactive relationship through the allocation of
management, the following key account managers to
could occur: each key client.
* failure of the business or one stream of the Regular reviews are scheduled
business; at management meetings covering
customer relations and the
future pipeline of opportunities
* reputational damage; and supported by the Group's
new CRM system. Senior leaders
across the Group support
* loss of a key customer or decline in customer key client relationships
loyalty. through regular 1:1 meetings.
---------------------------------------------------------------- -----------------------------------------------------------------
8. People
Availability and retention
of the right people
Focus on reduction of voluntary
Our people remain a key turnover of employees, in
pillar of our business. particular new hire turnover,
Ensuring the right people through better hiring for
are in the right roles fit, improved induction
is critical to our future and on-boarding, and employee
success and growth. The engagement initiatives.
Board has assessed that
the level of risk in Launch of market-benchmarked
this area is the same reward and benefits offer.
as last year. We need
to attract and retain Strategic workforce plan
the right talent to enable implemented to provide insight
achievement of our strategic on forecast skills needs
aims. Failure to do this and headcount and insight
risks our delivery and on skills and retention
growth as follows: hot spots or systemic issues
to target.
* failure to meet a specific business need or contract
requirement; Employer brand embedded
in talent attraction and
reflected in internal employer
* reputation damage, both corporate brand and value offer.
employment brand;
Talent fast-track programme
in place to retain and progress
* loss of project specialisms; key talent at all levels.
Balanced Business strategy
* over-reliance on key staff; and agreed with the ExCo to
drive inclusion and diversity.
* loss of key skills. Targeted action taken to
improve the diversity mix
and inclusive work climate
(including internal target-setting).
---------------------------------------------------------------- -----------------------------------------------------------------
9. Innovation
Insufficient innovation
to maintain market position
The delivery of the Group's
We operate in an increasingly services already incorporates
dynamic and changing innovation and technology
environment. To counter at a number of levels, whether
the risks associated through the built environment
with this and, most importantly, it is delivering (e.g. smart
to exploit the opportunities motorways, energy-efficient
it presents, we must buildings) or the way in
embrace innovation and which it delivers its services
capitalise on technology (e.g. BIM, digital technology,
advancements to ensure predictive data, new construction
we maintain our market methods).
position.
Given the heightened importance
Given the depth and pace of this area, the Group
of change in this arena has revised one of its strategic
this risk/opportunity objectives in the year (Embracing
has increased in focus innovation and technology
and importance from last across our business) and
year and is now listed launched its #forwardthinking@kier
as a PRU. Failure to plan. This has included
manage this risk could the appointment of a Group
result in: Innovation Director and
the launch of a Group-wide
* loss of new and current business to competitors; Innovation Forum.
As part of its plans to
* new market entrants lead the way on innovation to our further promote innovation
detriment; and technology, the Group
will:
* loss of staff due to lack of innovation or failure to * ensure that employees in every business have access
act on ideas; to online innovation and idea-sharing platforms;
* innovation costs not being managed effectively; and * establish a clear digital strategy supported by an
information management strategy and digital life
skills programme;
* negative internal and external publicity.
* launch a GBP1m pa seed fund (the Kier Accelerator) to
encourage new ideas/investment; Increase the rotation
of candidates across its graduate/early career
programme to further increase vibrancy of thinking
and seeding of ideas;
* increased external marketing activity to position our
existing innovation; and
* align leadership and development programmes to
include a clear focus on innovation and technology.
---------------------------------------------------------------- -----------------------------------------------------------------
Additional macro-economic risks
Brexit
The UK's departure from the EU ('Brexit'), will
impact Kier in a number of ways. Although these
risks are yet to be fully understood and quantified,
we are mindful of the many areas of potential risk
and uncertainty, including issues around the free
movement of people, delays in major infrastructure
investment and trade restrictions.
We are actively monitoring the UK Government's
position on the various matters for negotiation
and the potential impact these may have on Kier,
and will act accordingly through various working
parties and task forces. In last year's Annual
Report, we referred to the risk of a significant
decline in the property market following the EU
referendum result. Instead, greater volatility
materialised in this market providing a number
of opportunities post the Brexit vote for our Property
division. Our largely non-speculative approach
to property investment provides mitigation against
market volatility. We will continue to monitor
changes in the property market and respond accordingly.
-----------------------------------------------------------------------------------------------------------------------------------
Related party transactions
The following information is extracted from note 29 to the Company's consolidated financial statements for the year ended 30 June 2017.
Related parties
Identity of related parties
The Group has a related party relationship with its joint ventures, key management personnel and pension schemes in which its employees participate.
Transactions with key management personnel
The Group's key management personnel are the executive and non-executive directors as identified in the directors' remuneration report on pages 82 to 101 (inclusive).
In addition to their salaries, the Group also provides non-cash benefits to directors and contributes to their pension arrangements as disclosed on page 94. Key management personnel also participate in the Group's share option programme (see note 25).
Key management personnel compensation comprised:
2017 2016
GBPm GBPm
============================================ ===== =====
Emoluments as analysed in the directors'
remuneration report 4.5 4.9
Employer's national insurance contributions 0.7 0.7
============================================ ===== =====
Total short-term employment benefits 5.2 5.6
Share-based payment charge 0.4 0.8
============================================ ===== =====
5.6 6.4
-------------------------------------------- ----- -----
Transactions with pension schemes
Details of transactions between the Group and pension schemes in which its employees participate are detailed in note 8.
Transactions with joint ventures
2017 2016
GBPm GBPm
==================================== ===== =====
Construction services and materials 0.1 -
Management services 3.2 3.0
Interest on loans to joint ventures 0.8 0.3
==================================== ===== =====
4.1 3.3
==================================== ===== =====
Amounts due from/(to) joint ventures are analysed below:
2017 2016
GBPm GBPm
======================================== ===== =====
Saudi Comedat Company Limited - (0.4)
Staffordshire Property Partnership 0.1 -
Kier Trade City Holdco 1 LLP 10.7 10.3
Kier Reading Holdco 1 LLP 15.0 15.0
Kier Sovereign LLP 0.3 3.0
Tri-link 140 Holdings LLP 1.4 1.4
Kier Foley Street LLP 20.9 20.9
Blue3 (London) (Holdings) Limited - 2.1
Kier (Newcastle) Investment Limited - 4.8
Lysander Student Properties Investments
Limited - 3.3
Blue3 (Staffs) Holding Limited - 2.3
Winsford Devco LLP 1.1 -
50 Bothwell Street Holdco 1 LLP 4.7 -
54.2 62.7
======================================== ===== =====
Directors' responsibility statement
The following statement is extracted from page 104 of the Annual Report.
Each of the Directors, whose names and functions are set out on pages 66 and 67, confirms that to the best of his or her knowledge:
-- the financial statements contained in this Annual Report, prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company and the undertakings included in the consolidation as a whole; and
-- the management report contained in this Annual Report includes a fair review of the development and performance of the business and the position of the Company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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