TIDMKIE
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.GBP9.8bn (30
June 2022: GBP9.8bn) 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
GBP1.3bn National Highways A66 Northern Trans-Pennine contract
o Infrastructure - appointed by the Canal & River Trust to
the new GBP500m 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 GBP50m
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: 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 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:
+44 (0)7933 388
Investor Relations 746
+44 (0)1767 355
Kier Press Office 096
+44 (0)203 727
Richard Mountain, FTI Consulting 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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