REG - Kier Group PLC - AGM Trading Update

KierAnnouncement

17/11/2022 07:00

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RNS Number : 6902G  Kier Group PLC  17 November 2022

17 November 2022

Kier Group plc

AGM Trading Update

 

Kier Group plc ("Kier" or "the Group"), a leading infrastructure services,
construction and property group, issues a trading update for the period from 1
July 2022 to date prior to its Annual General Meeting today.

 

Trading

 

The current financial year, FY23, has started well and the Group is trading in
line with the Board's expectations. We delivered a strong operational
performance despite inflationary pressures, which continue to be mitigated.
Similar to the prior year, the Group's performance is expected to be
second-half weighted.

 

Order Book

 

We have a high quality and profitable order book which continues to reflect
the bidding discipline and risk management embedded in the business. We remain
focused on winning profitable work through our longstanding client
relationships and regionally based operations.

 

At the end of September, the order book stood at c.£9.8bn (30 June 2022:
£9.8bn) and is 90% secured for FY23, providing a high degree of certainty for
the Group. Long-term framework positions, as well as pipeline opportunities
from the Property division are excluded from the order book and represent an
additional opportunity. The Group continues to maximise value and
opportunities with strong momentum in its bidding activity.

 

Recent awards include:

 

·   Infrastructure Services:

o   Highways - announced as one of four contractors on the £1.3bn National
Highways A66 Northern Trans-Pennine contract

o   Infrastructure - appointed by the Canal & River Trust to the new
£500m Civil Engineering Contract Framework, securing the maximum number of
lots available to a single contractor

·   Construction:

o   Health - health and wellbeing centre in Ringland, Newport

o   Education - net zero carbon in-operation school for Deyes High School in
Sefton

o   Commercial - landmark high specification life sciences laboratory
development, "Refinery", at ARC West London, Hammersmith

 

Net cash / debt

 

The Group is on course to generate positive adjusted operating cash flow for
FY23, which will result in a net cash position at the year-end. As with the
prior year, the Group expects a seasonal working capital outflow in H1, with a
reversal expected in H2.

 

In July 2022, the Group repaid the remainder of its £50m working capital
supply chain facility ("KEPS").

 

Medium-Term Value Creation Plan

 

Against the backdrop of political and economic uncertainties, our core markets
have remained favourable and the Group continues to make good progress against
its medium-term value creation plan.

 

We are a strategic supplier to the UK Government and over 90% of our contracts
are with the public sector and regulated companies.

 

We remain confident in achieving our medium-term targets of:

 

 Revenue:                              £4.0 - 4.5bn
 Adjusted operating profit margin:     c. 3.5%
 Cash conversion of operating profit:  c. 90%
 Balance sheet:                        Sustainable net cash position with capacity to invest
 Dividend:                             Sustainable dividend policy of c.3 x cover through the cycle

 

Andrew Davies, Chief Executive Officer of Kier Group plc commented:

 

"The current financial year has started well and we are trading in line with
our expectations. The Group remains well positioned to continue benefiting
from UK Government infrastructure spending commitments and remains focused on
the delivery of a sustainable net cash position and a sustainable dividend, in
line with our medium-term value creation plan."

 

- ENDS -

 

For further information, please contact:

 Investor Relations                +44 (0)7933 388 746
 Kier Press Office                 +44 (0)1767 355 096
 Richard Mountain, FTI Consulting  +44 (0)203 727 1340

 

 

This announcement contains inside information for the purposes of Article 7 of
Regulation (EU) No 596/2014.

 

About Kier Group plc

 

Kier is a leading UK infrastructure services, construction and property
group. We provide specialist design and build capabilities and the knowledge,
skills and intellectual capital of our people to ensure we are able to project
manage and integrate all aspects of a project.

 

 

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 2022 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.

 

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