Kier trading ‘in line with expectations’ despite Brexit uncertainty

KierKier Group has today sought to reassure investors over the company’s viability in the wake of the EU referendum.

The property, residential, construction and services group said trading is continuing in line with expectations, adding that while the UK’s vote to leave the EU had “created some uncertainty”, it has not had any adverse effect on the business to date.

“The board, however, believes the group’s breadth of activities and strong order books provide both visibility and resilience,” it explained in a statement.

The firm said that buying May Gurney in 2013 and last year’s acquisition of Mouchel has “significantly increased the level of visible, long-term earnings” from its construction and services division and the property division has a “healthy” pipeline of projects totalling more than £1 billion, “largely comprising non-speculative schemes, and the residential division’s mixed tenure business has a pipeline of over £600m.”

Kier is also to consider a potential sale of its Mouchel Consulting business, which employs around 2,000 consultants and back office staff, as part of a major restructure of the group.

The streamlining plan will also see Kier close down its Caribbean construction arm and book exceptional hits from two major contracts at its environmental services business for a total one-off cost of £53 million.

Meanwhile, Kier’s net debt position of less than £140m at 30 June 2016 is ahead of the forecast range of £150m - £170m.

“Current trading is positive and the group will continue its disciplined approach to winning work and risk management,” the company said.

“In summary, and as shown following the successful integration of Mouchel, the group has a track record of driving efficiencies through the business as well as managing risk effectively. The group’s excellent cash performance, combined with our new fixed-rate facilities, provide a robust platform for the year ahead.”

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