In a trading update ahead of the annual general meeting today, Kier said that it remained on course to deliver £4m of synergies in the second half of the 2016 financial year, as previously forecast.
“The integration of Mouchel is progressing as planned,” it said. “Mouchel has delivered a strong performance since acquisition and the complementary capabilities that it brings to the group are being realised as we work with key clients on the group's broader offering, particularly in the highways, education, health and other infrastructure sectors.”
It added: “We have made good progress on the integration of our strategic highways and local authority highways businesses in order to maximise our performance in these markets. We also combined our utilities and infrastructure businesses, ensuring greater co-ordination of the group's operations and optimising client focus.”
The combined Construction and Services order books are now worth more than £9bn, while the house-building division expects to complete 2,350 this year, putting it 10% ahead of last year.
The developments business, Kier Property, is also busy. It has acquired a 46,000 sq ft mixed-use retail site in Wakefield and the planning permission process is underway. It has also completed the purchase of a 34,000 sq ft building in Fitzrovia, London, in joint venture with Investec.
Net debt at 31st December 2015 is expected to be £220m (31 December 2014: £156m), reflecting investment in the Property and Residential divisions and delays in receipts from public sector clients in Saudi Arabia. However, the board still expects to get its debt-to-EBITDA ratio down to 1:1 by 2017.
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