REG - Kier Group PLC - Trading Update

KierAnnouncement

18/01/2024 07:00

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RNS Number : 0702A  Kier Group PLC  18 January 2024

 

18 January 2024

Kier Group plc

 

Trading Update

 

 

Kier Group plc ("Kier" or the "Group"), a leading infrastructure services,
construction and property group issues a trading update for the six months
ended 31 December 2023 ("the period" or "first half"). The Group will publish
its results for the six months ended 31 December 2023 ("half year results") on
7 March 2024.

 

Trading

 

Consistent with the update in November 2023, the first half of the current
financial year continued to trade above the prior period and was in line with
the Board's expectations. This was driven by strong volume growth,
particularly in Construction. Similar to last year, the Group's performance is
expected to be second-half weighted.

 

Business integration

 

On 4 September 2023, Kier acquired substantially all of the rail assets of
Buckingham Group Contracting Limited from administration. The acquisition has
been successfully integrated into the Group's Transportation business.

 

Order book

 

The order book as at 31 December 2023 was c.£10.7bn, a c.6% increase on the
year-end position (30 June 2023: £10.1bn) and the prior year comparative (31
December 2022: £10.1bn). The Group has secured revenue of 92% for FY24,
providing a high degree of visibility. Long-term framework positions are
excluded from the order book and represent an additional opportunity. Bidding
discipline and risk management embedded across the business continue to drive
the high quality and profitable order book.

 

Recent awards include:

 

·   Infrastructure Services:

o   Natural Resources, Nuclear & Networks: Awarded a c.£30m contract
with Evolve to deliver a pipeline in Northern Ireland under their Gas to the
West project

·   Construction:

o   Awarded four education projects worth a total of c.  £150m, a
healthcare project worth c.£60m and the contract to deliver a new houseblock
for the Ministry of Justice at HMP Elmley worth over £100m.

 

Net cash / debt

 

Kier's focus on operational delivery and cash management alongside the cash
generation from the strong volume growth has successfully resulted in the
Group continuing to deleverage materially with average month-end net debt of
c.£(140)m (HY23: £(243)m) showing a significant improvement of c.£100m.

 

Kier is expected to report a modest net cash position at 31 December 2023
(HY23: £(131)m).

 

Dividend

 

The continued resilience in trading, order book security and ongoing
strengthening of the balance sheet provides the Board with confidence to
resume dividend payments in the current financial year, commencing with an
interim dividend to be announced alongside the half year results.

 

Andrew Davies, Chief Executive of Kier, commented:

 

"Kier has made a good start to the year, in line with our expectations. I am
particularly pleased with the progress we are making on reducing debt, which
has resulted in the Group materially deleveraging its balance sheet in the
first half. We have achieved this through disciplined growth as well as our
unstinting focus on operational excellence, cash management and cash
generation. Kier remains well positioned to continue benefiting from UK
Government infrastructure spending commitments and this gives the Board every
confidence in delivering 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

 

 

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 2023 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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