Kier Group PLC Trading update (0962M)
January 19 2021 - 2:00AM
UK Regulatory
TIDMKIE
RNS Number : 0962M
Kier Group PLC
19 January 2021
19 January 2021
Kier Group plc
Trading update
Kier Group plc ("Kier" or "the Group"), a leading construction
and infrastructure services group, today issues a trading update
for the six months ended 31 December 2020 ("the period" or "first
half").
Trading
The Group performed well in the first half and expects to
deliver half-year results slightly above the Board's expectations.
There was an improvement in site productivity through the period
despite COVID-19 restrictions.
The Group anticipates that a reduction in adjusting items in the
period will generate a statutory result materially better than the
corresponding period last year.
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. As
at 31 December 2020, Kier had been awarded places on long-term
frameworks worth up to GBP11bn, across a number of sectors
including, health, education and justice. In addition, several
existing frameworks were extended by 12 months.
In the first few weeks of 2021 the Group has also been awarded
an 8-year maintenance contract worth c. GBP200m with Transport for
London.
Strategic actions
Kier continues to execute its strategy to simplify the Group and
strengthen the balance sheet.
The Group now expects to deliver at least GBP105m of annualised
cost savings by the end of FY21, through self-help measures. The
Group continues to review its cost base to identify additional cost
saving measures.
The Group continues to make progress with the divestment of Kier
Living and remains focussed on driving an improvement in cash flows
through a disciplined approach to appropriate capital allocation.
In addition, the Group is continuing to consider a potential equity
raise.
Net debt
The Group is expected to generate positive adjusted operating
cash flow at the half year end.
The cash generation has allowed the Group to; reduce supplier
payment days from 38 to 34 (57: HY19); to ensure that all Kier
companies have been reinstated to the Prompt Payment Code; to start
repaying deferred PAYE and VAT commitments from FY20; and paying
the adjusting items accrued for at 30 June 2020.
The Group's average month-end net debt for the six-month period
to 31 December 2020 remained at a level similar to the average
month-end net debt for FY20, with significant liquidity
headroom.
Outlook
The health, safety and wellbeing of our employees remains a key
priority and the resilience demonstrated by our people in the first
six months of the year has been exceptional. The Group's sites have
operated under site operating procedures which reflect Public
Health England's guidance, since March 2020. Accordingly, the Group
was well prepared for the national lockdown introduced in early
January 2021.
The Group continues to win high quality work in our chosen
markets resulting in a strong order book which is slightly above
year-end levels, despite the difficult trading environment due to
the pandemic. The projects awarded consist of those which have been
bid and delivered under our increased transparency, governance and
controls.
This order book, combined with our project management expertise,
longstanding customer relationships and recent government
announcements of increased spending on national infrastructure,
gives us confidence in the outlook for the Group.
- ENDS -
For further information, please contact:
Andrew Collins, Head of Investor +44 (0)7933 388
Relations 746
+44 (0)1767 355
Kier press office 096
Richard Mountain / Nick Hasell, +44 (0)203 727
FTI Consulting 1340
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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END
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