Kier Group PLC Trading Update (6990N)

TIDMKIE

RNS Number : 6990N

Kier Group PLC

22 January 2019

22 January 2019

KIER GROUP PLC - TRADING UPDATE

Kier Group plc ("the Group"), a leading infrastructure services, buildings and developments & housing group, announces its trading update covering the period since its previous trading update of 16 November 2018. The Group will announce its half-year results on 21 March 2019.

Highlights include:

   --     On track to meet its FY19 expectations; 

-- Average month-end net debt of c.GBP370m (H2 FY18: GBP410m), reflecting the impact of the recent rights issue; and

   --     The Future Proofing Kier programme (the "FPK programme") is progressing well. 

Trading

The Board is confident that the Group will meet its FY19 expectations, with the full-year results being weighted towards the second half of the financial year, as usual.

During the period, the Infrastructure Services and Buildings businesses won a number of new contract awards and now have 100% visibility of the forecast revenue for FY19 and an order book of more than GBP10bn.

Examples of recent key awarded contracts include:

   --     the renewal of a three-year c.GBP70m utility services contract in the south west of England; 

-- over GBP500m of regional building projects secured during November and December, including a major office development for Argent at King's Cross in London, a new research facility for the Pirbright Institute in Surrey, a flagship development for the Royal College of Art and a new hospital for Frimley Health NHS Foundation Trust; and

-- being appointed to three lots on the North West Construction Hub three-year GBP1.5bn framework.

In the Developments & Housing businesses, we have experienced a stable housing market, evidenced by a current sales rate of 0.8 units per sales outlet per week (2018: 0.7). In property developments, we have sold all schemes which were forecast to be sold in the period, which highlights the strength of our regional development activities.

Future Proofing Kier programme

As previously reported, the costs of implementing the FPK programme in the first half of the financial year have exceeded the savings by GBP10m. The full-year FY19 position is still expected to be earnings and cashflow neutral and the programme is progressing well.

Balance Sheet

The Group's balance sheet at 31 December 2018 has been strengthened following the receipt of the GBP250m net cash proceeds of the recent rights issue and the Group remains on track to report a net cash position at the year-end (30 June 2019). As at 31 December 2018, the Group's net debt was c.GBP130m (31 December 2017: GBP239m), reflecting the rights issue proceeds and the acceleration of supply chain payments, as expected. The average month-end net debt for the six months ended 31 December 2018 was c.GBP370m, as compared with GBP410m for the six months ended 30 June 2018.

- ENDS -

For further information, please contact:

 
 Louise Turner-Smith, Kier investor    +44 (0)7976 
  relations                             790012 
                                       +44 (0)1767 
 Kier press office                      355903 
                                       [phone] 
 Nick Hasell, FTI Consulting            1340 
 

Cautionary statement

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 2018 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 [e-mail] or visit www.rns.com.

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January 22, 2019 02:00 ET (07:00 GMT)