12th Nov 2014 08:34
LONDON (Alliance News) - Kier Group PLC on Wednesday said it is on track to meet expectations for the year, as it reiterated its forecast for its residential and services arms to be weighted to the second half and said its order books in construction and services stand it in good stead to meet its targets.
The FTSE 250-listed property, construction and services company said its property arm was trading in line with expectations, with a development and structured finance pipeline of over GBP1 billion at present.
Kier has formed a joint venture with Amber Infrastructure on up to three student accommodation schemes per year, with the first to be built in Glasgow and to be valued at around GBP20 million. The company said construction has started and it expects the work to be completed in time for the new academic year in September 2015.
The group said the performance of its residential division is on track, following the consolidation of its housebuilding activities into a single division in July. It said the unit is still facing supply chain pressures, but said inflationary pressure on materials and labour does appear to be easing.
It expects around 1,500 sales for its mixed tenure and contracting business in the current financial year to the end of June, 2015, including 350 private sales. It expects a significant number of affordable housing completions to take place in the first quarter of next year, with the current affordable housing funding round to end on March 31, 2015.
In private housing, it remains on track for around 700 completions on its own land this year.
Kier said its construction arm has continued its good performance, with a significant contribution to revenue in the new financial year from frameworks. Its order book of secured and probable work at GBP2.6 billion covers all of its anticipated revenue for the current financial year, ahead of the same period a year earlier. Operating margins in the construction business remains in line with expectations at around 2%.
Its services arm has an order book of GBP3.7 billion, excluding potential contract extensions worth around GBP2 billion, with good visibility for future work. The order book represents more than 90% of its targeted revenue for the full year, Kier said.
The company said its construction and services order books now stand at GBP6.3 billion, up from GBP6.2 billion at the end of its last financial year in June. The volume represents 95% of its forecast revenue for 2015 and a robust pipeline for 2016, it said.
Kier shares were down 0.5% to 1,479.4 pence on Wednesday.
By Sam Unsted; [email protected]; @SamUAtAlliance
Copyright 2014 Alliance News Limited. All Rights Reserved.
Related Shares:
Kier