Kier Group PLC Full Year 2021 Trading Update (9918E)
July 13 2021 - 2:00AM
UK Regulatory
TIDMKIE
RNS Number : 9918E
Kier Group PLC
13 July 2021
13 July 2021
Kier Group plc
Full Year 2021 Trading Update
Kier Group plc ("Kier" or "the Group"), a leading infrastructure
services and construction group issues a trading update for the
year ended 30 June 2021, ahead of publishing Full Year 2021 Results
on 16 September 2021.
Trading
Trading since the announcement of our half year results
continued to be resilient and consequently the Group's full year
results are anticipated to be moderately ahead of the Board's
expectations. This reflects strong operational performance and the
confidence we outlined in our half year results in April 2021.
These results also reflect the numerous cost savings realised in
responding to the reduced volumes caused by COVID-19 during the
financial year. The Group expects to deliver a full year 2021
adjusted operating profit margin of approximately 3%.
Order Book
Kier continues to win new business in its markets on terms and
at rates which reflect the bidding discipline and risk management
introduced under the Group's Performance Excellence programme.
The Group's year end order book continues to be underpinned by
significant long-term framework agreements including new awards in
the second half of the year albeit at lower levels than that seen
last year due to procurement delays resulting from the
pandemic.
Recent contract awards include:
-- Infrastructure Services:
o Highways - GBP190m Area 3 Maintenance and Response contract by
Highways England
o Infrastructure - GBP50m early works contract for HS2 Phase
2a
o Utilities - Openreach contract to construct new broadband
infrastructure in West and South of England and Scotland
-- Construction - appointed to the Ministry of Justice's GBP1bn New Prisons Programme
o Kier Places - GBP75m capital works contract by Hammersmith and
Fulham council
Successful fundraising and capital structure
The successful capital raise, together with the recent sale of
Kier Living, has raised c. GBP350m of gross proceeds for the Group.
This, together with the extension of the Group's 2017 RCF Facility
to 31 January 2025, provides the Group with the financial and
operational flexibility to continue to pursue its strategic
objectives within its chosen markets and will allow it to further
enhance and capitalise on its position as a strategic partner to
its customers.
The Group is confident that it now has the platform to achieve
its medium-term targets of:
Revenue: GBP4.0 - 4.5bn
Adjusted operating profit c. 3.5%
margin:
Cash conversion of operating c. 90%
profit:
Balance sheet: Sustainable net cash position with capacity
to invest
Dividend: Sustainable dividend policy with dividend
cover of around three times earnings across
the cycle.
Net debt
The Group is expected to generate positive adjusted operating
cash flow for the full year 2021.
With cash generation continuing to be strong, we anticipate
reporting a net debt / cash position at the year end, better than
the Board's previous expectations.
The Group's average month-end net debt for FY21 remained at a
level similar to the average month-end net debt for FY20 due to the
Group's receipt of the capital raise and Kier Living sale proceeds
arriving in the final months of the year.
Andrew Davies, Chief Executive Officer of Kier Group plc
commented:
"The Group's proven track record of delivery and focus on
selected markets, coupled with its strong order book and
strengthened balance sheet, gives the Board confidence in our
strategy and the continued success of the Group."
- ENDS -
For further information, please contact:
+44 (0)7933 388
Investor Relations 746
+44 (0)1767 355
Kier press office 096
+44 (0)203 727
Richard Mountain, FTI Consulting 1340
About Kier Group plc
Kier is a leading UK infrastructure and construction services
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 2020 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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