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Fri May 20 2022

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Kier trading statement avoids surprises

20 Jan A trading statement from Kier Group this morning confirmed that business is meeting expectations but there was no mention of Tilbury Douglas.

Kier chief executive Andrew Davies
Kier chief executive Andrew Davies

Since Sky News broke the story on Tuesday this week that Kier was in advanced talks to buy Tilbury Douglas there has been no comment from either contractor. Today’s trading statement from Kier ignored the issue altogether, making no mention of any interest (or lack of) in acquisitions.

“We remain focused on winning work through our long-standing client relationships and regionally based operations,” was the most it said about corporate strategy.

The Kier board said that the six months ended 31st December 2021 – the first half of Kier’s 2022 financial year – had gone well, despite inflationary pressure. The order book at 31st December was at £8.0bn, up from £7.7bn at the end of June.

Contract awards during the period included more than £1bn of work in highways, including the A66 Northern-Trans-Pennine scheme, the £66m  Mogden sewage treatment works scheme for Thames Water, a £93m job for new clinical buildings at Luton & Dunstable hospital and the £36m Sunderland eye hospital.

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Average month-end net debt has reduced from £436m to below £200m as a result of last year’s £241m rights issue and the sale of Kier Living.

The board said that it “remains confident in achieving its medium-term targets” of growing revenue from last year’s £3.3bn to between £4.0bn and £4.5bn, with an adjusted operating profit margin of 3.5% and cash conversion of operating profit at around 90%.

Chief executive Andrew Davies said: “The performance of the group over the last six months reflects our significantly enhanced resilience and strengthened financial position. The first half of the year has started well and we continue to trade in line with our expectations. The increased order book gives us the confidence in the achievement of our medium-term value creation plan and the continued success of the group, which with financial and operational flexibility, is well placed to pursue its strategic objectives within its chosen markets."

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MPU
MPU

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