13th Nov 2013 09:54
LONDON (Alliance News) - Construction company Kier Group PLC Wednesday said it is on track for the full year, as both its construction and property divisions have secured a number of profitable contracts.
In an interim management statement for the period July 1 to date, Kier said it won GBP450 million worth of work during the period much of which came through framework agreements.
Kier said its order book of secured or probable work stood at GBP2.2 billion. This represents all of the forecast revenue for the financial year and was ahead of the equivalent position last year.
The company said the business had also been boosted by the acquisition of rival firm May Gurney earlier this year, with GBP300 million of new work secured. Kier said this provides visibility of revenues beyond 2020.
The property division also progressed well with a GBP1.5 billion combined housing and development pipeline. The division undertakes investment, development and asset management across a broad spectrum of property uses.
Kier said occupier and investor activity in the property market is improving, and the business is pursuing an increased number of opportunities.
"It continues to target a 15% return on capital while also generating revenues for our Construction and Services divisions," it said.
One of the new deals includes an agreement with Thames Valley Housing, working with Woking Borough Council to provide long-term community housing for the borough, together with additional private housing.
In the affordable housing business, Kier was awarded new schemes valued at more than GBP150 million, while it said its private housing business also remains on track for more than 500 completions this financial year.
Despite signs of economic growth, Kier warned it is experiencing "inflationary" cost pressures, particularly in its construction businesses.
The stock was trading at at 1,755.70 pence Wednesday morning, down 52.30 pence or 2.9%.
By Anthony Tshibangu; anthonytshibangu@alliancenews.com; @AnthonyAllNews
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