Kier Group PLC Kier Residential launches JV with Cross Keys Homes (2598A)
March 23 2017 - 3:01AM
UK Regulatory
TIDMKIE
RNS Number : 2598A
Kier Group PLC
23 March 2017
For release at 0700 hours on 23 March 2017
Kier Residential launches joint venture with Cross Keys
Homes
Kier, a leading property, residential, construction and services
group, today announces that, on 22 March 2017, it established a
joint venture with CKH Developments Limited ("Cross Keys"), a
housing association and care services provider which principally
operates in the east of England (the "JV").
Kier will transfer part of its land bank and a number of its
residential developments in the east of England, valued at up to
GBP97m, into the JV with Cross Keys contributing up to GBP4m of
equity into the JV. Kier will receive a cash payment of up to
GBP64m for the assets and the JV will be funded by a non-recourse
revolving credit facility from HSBC Bank plc. There will be a 90:10
split of economic ownership and each party will have 50:50 voting
rights. Initial completion of the transaction is expected to take
place by 31 March 2017, with subsequent completions expected to
take place prior to 30 June 2017 upon the transfer of further
sites.
The JV is expected to be cash generative from completion of the
transaction. The transaction will release funds to Kier for
reinvestment in other parts of its business in line with its 15%
return on capital employed hurdle. Kier expects the transaction to
be earnings accretive in 2019.
Kier and Cross Keys have a long-standing relationship in the
eastern region, operating in complementary sectors of the housing
market. Kier will provide its development, land-buying,
construction and sales expertise to the JV. Cross Keys will provide
access to key strategic relationships for the benefit of the
JV.
Haydn Mursell, Chief Executive of Kier, said: "The joint venture
represents a strategic milestone for Kier Residential. This
transaction enables us to accelerate our strategy to recycle the
capital employed in the Kier private land bank to drive the future
growth of the Group and improve our overall ROCE. In addition, the
joint venture plays a role in addressing the UK Government's
housing strategy by creating a vehicle which can focus on
delivering new homes in the east of England, a geography both
parties know well."
-Ends-
For further information,
please contact:
Richard Mountain/Nick Hasell
(FTI) +44 (0) 203 727 1340
+44 (0) 1767 355 903/
Kier press office +44 (0) 7791 719452
Louise Turner-Smith, Head
of investor relations +44 (0) 7976 790012
About Kier Residential
Kier has over 70 years of experience in the residential sector,
with access to a wealth of resources and expertise. Kier
Residential offers a UK-wide capability to build a broad spectrum
of residential housing whether for private sale on our own land,
mixed tenure housing or contract building for a client.
Specialising in a range of tenures, it constructs and maintains
buildings for open-market sale, private rental, affordable rent and
shared ownership. Kier's housing teams develop more than 2,100
units of both private and affordable housing schemes every year,
with expertise running through the whole development process from
land assembly and funding through to aftercare.
About Cross Keys
Cross Keys is a housing association and residential builder
based in Peterborough. It was established as a not-for-profit
organisation in 2003 by Peterborough City Council. It now manages
over 11,000 properties and houses around 14% of the city's
population. In order to tackle the housing shortage in the UK,
Cross Keys is committed to building more affordable homes. Cross
Keys provides homes through social housing, shared ownership,
private rent and leasehold and has plans to expand into new
geographic areas. For further information on Cross Keys, please see
www.crosskeyshomes.co.uk
Cautionary statement
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 2016 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.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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