Kier Share Discussion Threads

[stdyeddy] 05/9/2023 10:26

Judging by the share price today, the market appears to be indifferent to the deal. My guess is that part of the incentive for this purchase was to prevent disruption to the HS2 works where Kier had already made an offer to bypass Buckingham management and pay Buckingham staff working on the Kier section.

It also looks like a useful addition to Kier's order book and £9.6m is evidently nothing to Kier since -- according to Construction Enquirer -- "Given the business’ modest size, Davies said the acquisition would not materially impact the Kier’s forecasts for FY24, nor its year-end or average net cash position."

Could it be that Kier actually has an 'average net cash position' now? Somehow, I doubt it, but maybe we are in for a nice surprise in the full year accounts on the 14th. The net cash position for the full year was reportedly £60m in the trading update, but day to day? I'm looking fwd to seeing the numbers.

[bathboy2] 05/9/2023 10:09

Impressive figures , but was , or is it going to be profitable work ??

[stdyeddy] 05/9/2023 10:05

Here's the media announcement from Kier:


Kier acquires Buckingham Group’s rail division
Kier has today announced it has agreed to acquire substantially all the rail assets of Buckingham Group, which has gone into administration. It will become part of the Kier Transportation business, which designs, builds and maintains infrastructure for the highways, rail, aviation and ports sectors.

This acquisition strengthens Kier’s position in the UK rail market, with projects spanning the country.

Andrew Davies, chief executive at Kier Group, said: “We have previously stated that we would consider value accretive acquisitions in core markets where there is potential to accelerate the medium-term value creation plan. This acquisition is one such example – it is an excellent strategic fit and accelerates our rail strategy, providing work with new rail clients and increasing our capabilities. I am delighted to welcome our new employees, clients and suppliers to Kier.”

Joe Incutti, Group managing director at Kier Transportation, said: “The Buckingham Group rail business had built a very strong reputation for assured delivery in the rail sector. I am pleased that we now welcome 180 new colleagues into Kier Transportation. The team will further strengthen our capability and this helps to bring an end to a period of uncertainty for former Buckingham Group clients and employees by ensuring continued delivery on existing projects, and the retention of hugely important skills and expertise in the rail sector.”

[stdyeddy] 05/9/2023 10:00

A few useful numbers reported in industry journal Building.


NEWS
Buckingham break-up begins as Kier snaps up £150m rail business
Firm pays close to £10m for business which employs 180 staff

The break-up of Buckingham has begun with Kier picking up the firm’s rail division, which includes its jobs for Network Rail and HS2, for £9.6m.

The move is expected to add more than £150m of revenue to Kier’s transport arm and saves the jobs of 180 staff out of the 660 currently employed by Buckingham.

In its last set of accounts, Buckingham’s rail business had a turnover of £92m in the year to December 2021 and a forward book of £176m. Its jobs include work at Leeds station where it is extending platforms.

And the firm’s HS2 business, set up in 2020, had income of £56m in 2021 with the company working for a team including Kier on a series of contracts on the new railway across the Chilterns.

[stdyeddy] 05/9/2023 09:57

It looks like Fulham has done for Buckingham Group what the arabs did to Carillion. A small firm about 1% of Kier's workforce but an order book of about 7% Kier's size. Quite impressive really, but they evidently haven't kept a firm hand on contract costs and this story underlines Kier's discipline in walking away from unprofitable contracts.

[itisonlymoney] 05/9/2023 00:52

a lot of those buildings were built by the councils themselves, back in the day when councils had their own architects.

[itisonlymoney] 05/9/2023 00:46

but thats not what this is. if you decide to use a felt roof, you know that needs replacing in 10 yrs. you cld have pitched roof with tiles but its much more expensive initially. these were cheap buildings, cheap material, but the tradeoff was they dont last for long. its the rebuilding prgram that hasnt been kept up, not a problem with material. the cost benefit isnt for contractors. the benefit was for the initial buyer. it was cheaper.

the benefit to contractors now is really a deferred benefit that they shouldve already had. contracts to rebuild that were not implemented. now the putting off cant be put off any longer,

[leucadia] 04/9/2023 22:07

Whilst there may be a net benefit to contractors from the aerated concrete crisis I think that Stutes's concerns about the government introducing an industry levy to help pay for the repairs is worth considering. I note from a gov.uk web site that

"New proposed laws, announced in February under the Building Safety Bill, will ensure qualifying leaseholders are protected from the costs of historical building safety defects, including total protection against cladding costs. Today’s deal establishes that the industry responsible - not innocent leaseholders - will pay."

Of course, leaseholders are not generally involved in the aerated concrete crisis but this cladding triggered legislation establishes a precedent that the construction sector can be held financially responsible for current problems caused by historic use of types of building products, even if the companies which installed the materials no longer exist because of the passage of time.

[itisonlymoney] 04/9/2023 20:36

now for those raac schools and hospitals. decent contracts pls.

[itisonlymoney] 04/9/2023 20:35

but yt again, kier to the rescue... doesn't hurt the kier rep. big dependable, got the money to do what's needed so long as its not refinancing the entire firm again. good that they had £60m in cash. we shld see that on the books in 10 days.

[itisonlymoney] 04/9/2023 20:34

kier had offered to pay the workers before the deal. now thye get the order book of £150m. a big part of that would be hs2. if kier can make it pay a margin of 3% then the business has paid for itself in two yrs. a good deal. lets see the details tho. davies knows all about pension trustees bcos of what he went thru to sell kier living. based on that and how he knows what kiers string of expensive buys did to the firm, i am sure he was the right person to do this deal and it is bound to be a good one for kier. that's what i'm hoping anyway.

[stutes] 04/9/2023 20:04

If Buckingham Rail unit was a subbie for K's jv, it may have been a done- deal to mitigate delay, cost and damages for K to buy B"s Raul unit?

[itisonlymoney] 04/9/2023 15:57

kier has bought buckingham groups rail business. under £10m. a firesale price i hope.

[itisonlymoney] 04/9/2023 10:17

you mn a long and dependable pipeline of work for kier. you cant have business failures and labour scarcity at the same time. . raac means more wrk for kier. obviously.

kier built the emergency temporry hospitals during covid. just about grnteed to get something from the current crisis. kier did emergency dam work a cpl of yrs back. known as being a firm that can take action quick.

[stutes] 04/9/2023 09:30

As for RAAC Chancellor of the Exchequer is saying no new money - therefore a slow and long timescale for remedial/ new constr Stdyeddy fails to join the dots up - et al., macro, workload, number of administrations, cost of living squeeze, labour scarcity. Might be simpler if you look at FT report on German construction sector and ask if there are similar factors at work in UK?

[stdyeddy] 02/9/2023 14:46

RAAC: Public buildings at risk from concrete failure, experts warn.

...Matt Byatt, president of the Institution of Structural Engineers, said buildings built with RAAC were "beyond their serviceable life" and the issue was flagged several years ago, including to government.

[stdyeddy] 02/9/2023 14:31

stutes' grotesque little troll face is showing -- trying to find something negative to say on this board when it's obvious that a very large contract opportunity has fallen into the laps of the industry due to councils using cheap time-limited materials for public buildings in the 60s onwards. Turns out it's not just schools. This could be a huge boost for construction generally.

[itisonlymoney] 02/9/2023 12:24

only yr idiotic troll logic. maybe you shld ask tesco to refund you for milk that goes off after a month in yr fridge. this can only end with a huge contract for the biggst school builder in the UK, kier.

[stutes] 02/9/2023 09:18

Will construction firms end up paying for the aerated concrete remedial work - HMG forced the industry to fund the remedial work following Grenfelk Tower fire; in both the product received approval so logic suggests HMG could coming knocking again?

[bathboy2] 01/9/2023 09:23

Sad that construction lifetimes are so low , anything new built today , is on a projected 25 year life , i get the idea that it keeps property up to date , but you seriously wouldn't want to own , my kids will definitely never own , i will leave them my own well built properties , built to last , with the correct maintenance, forever , 1 i have is 80 years old , built on minimal footings , not a structural crack anywhere , the skill and time is not taken anymore to do a decent job

[stdyeddy] 01/9/2023 01:41

Over 100 schools told to shut buildings over RAAC concrete.


This reinforced aerated concrete was very popular 30 years ago but has a shelf life which has reached the end... today! I wonder which contractor might be best placed to gain the immediate and urgent contracts for remedial work to make these schools safe, or even functional. I wonder, wonder, wonder... Could it be our favourite construction firm, currently the largest schools builder in the country? So much wondering to be done... 100 schools with probably hundreds more to come. I wonder what the value of this work will be. Wondering, wondering, wondering... underground, overground, wondering free...

[stutes] 31/8/2023 07:55

Right or wrong management changes made before results make me wonder if there are issues within that part of the business?

[stdyeddy] 30/8/2023 20:31

Two weeks to go until the annual report is published -- we should see some news-flow from Kier around the date. Also, a very positive report from our friends at Costain, despite them losing several contracts. Costain's share price is up substantially. Kier has already told us in the trading update that results are good. Let's see what the final earnings number does to the p/e ratio -- my guess is that we are looking at a significant rise in profit.

[stdyeddy] 30/8/2023 20:26

Also, Lombard Odier are back as a major shareholder in Kier -- see the RNS today at 3pm.

[stdyeddy] 30/8/2023 20:24

There's been a string of contract wins for Kier recently that the trolls here seem to be averse to commenting on. The latest today:

NEWS
Kier, Laing and Wates land £225m prisons job



Trio to build 1,200 prison places with a standardised construction approach

Kier, Laing O’Rourke and Wates have landed a £225m Ministry of Justice contract to build 1,200 prison places across the UK.

The deal is understood to be separate from the existing £1bn programme to build four new adult male prisons that the trio of contractors are working on with ISG but will use a similar standardised design and construction approach.