15th May 2014 07:46
LONDON (Alliance News) - Kier Group PLC saw its shares rise Thursday after it said its construction business was seeing more opportunities in the UK and overseas, its property unit had maintained its pipeline and won new contracts, and the business as a whole was "on course" in its current financial year.
In a statement, the company said its construction business was experiencing more opportunities as the market recovered in the UK. It said it was still being selective about bidding for contracts, but had won more than GBP500 million of new contracts so far in 2014. Operating margin in the UK business remains around 2%, it said.
It said its order book of secured or probable work stood at about GBP2.6 billion, representing all the forecast revenue for the financial year to end-June, 2014, and more than 80% of revenue for the 2015 fiscal year, an improvement on the situation a year ago.
Kier said it also had a strong pipeline overseas in its construction business.
The order book in its services division stands at about GBP3.5 billion, all of forecast revenue for the current financial year and more than 80% for fiscal 2015. The unit has secured about GBP400 million so far in 2014, and its operating margin is expected to be above 4.5%, meeting expectatuons.
Its property business, meanwhile, has maintained its pipeline above GBP1 billion for property development and has delivered its targeted 15% return on development capital.
"We continue to invest working capital to grow the mixed tenure housing business, which has a pipeline at the end of March of approximately GBP450 million," the company said in its statement. "The private housing business performed well, supported by the Government's Help to Buy scheme, and remains on track to deliver approximately 600 completions this year."
"Kier's underlying trading performance remains on course. We maintain good visibility of earnings for 2015 and continue to invest for growth," it said.
Kier shares were up 2.6% at 1,688 pence early Thursday, one of the top gainers on the FTSE 250.
By Steve McGrath; [email protected]; @SteveMcGrath1
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