Kier Group PLC Trading Update (1961N)
January 19 2023 - 2:00AM
UK Regulatory
TIDMKIE
RNS Number : 1961N
Kier Group PLC
19 January 2023
19 January 2023
Kier Group plc
Trading Update
Kier Group plc ("Kier" or "the Group"), a leading infrastructure
services and construction and property group issues a trading
update for the six months ended 31 December 2022 ("the period" or
"first half"). The Group will publish its results for the six
months ended 31 December 2022 ("half year results") on 9 March
2023.
Trading
The Group's half-year results are anticipated to be in line with
the Board's expectations. This reflects a strong operational
performance in the period despite inflationary pressure which the
Group remains confident it can continue to mitigate going
forward.
Order Book
Kier continues to win new, high quality and profitable work in
its markets on terms and at rates which reflect the Group's bidding
discipline and risk management.
The order book at 31 December 2022 is expected to be
c.GBP10.1bn, an increase of c.3% from the year-end position (FY22:
GBP9.8bn) and significantly higher than the prior period (HY22:
GBP8.0bn).
The Group has secured revenue of over 90% for FY23 providing a
high degree of visibility against a backdrop of ongoing wider
market uncertainty.
Recent awards include:
-- Infrastructure Services:
o Utilities - reappointed to the GBP55m per annum, 3 year
extension of the Network Service Alliance framework by South West
Water and Bournemouth Water
-- Construction - re-appointed to the North West Construction
Hub High Value Construction Framework; appointed on a GBP22m
investment programme by the Isle of Wight NHS Trust to redevelop St
Mary's Hospital and awarded three school projects by the Department
for Education
o Kier Places - preferred bidder on a GBP75m housing maintenance
contract for 10 years with RHP Group across its housing portfolio
in Richmond, Hounslow, Kingston and Hillingdon
Net debt
Kier continues to make progress towards its medium term plan of
achieving a sustainable net cash position. There has been a
significant reduction in debt-like items from cash flow generation
compared to HY22.
Net debt at 31 December 2022 is expected to be similar to 31
December 2021. Net debt was impacted by the seasonal working
capital unwind in the business. This is typical for the first half
and a reversal is expected in the second half. The Group continues
to generate positive operating cashflow in FY23 and expects to have
a net cash position at the year-end.
Average month-end net debt position is expected to be c.GBP50m
higher than the prior period (HY22: GBP191m). This is in line with
the Board's expectations. Positive operating cash flow was used to
reduce the average month-end supply chain finance facility ("KEPS")
balance by over GBP60m, pay adjusting items, pension deficit
obligations and the remaining HMRC Covid-19 support of
c.GBP10m.
The Group fully repaid its remaining GBP50m KEPS facility in
July 2022 followed by c.GBP54m of its Revolving Credit Facility
("RCF") and USPP Notes which matured in December.
Medium Term Value Creation Plan
The Group remains confident in achieving 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: c.3 x cover
through the cycle
Andrew Davies, Chief Executive Officer of Kier Group plc
commented:
"The Group's performance over the last six months is in line
with our expectations and reflects a good start to the year. We
expect to generate positive operating cashflow for the full year
and deliver a net cash position at the year end. The Group is well
positioned to continue benefiting from UK Government infrastructure
spending commitments and 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
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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