19th Jan 2023 11:35
(Alliance News) - Kier Group PLC on Thursday said it expects its half-year results to be in line with its expectations, after it successfully mitigated inflationary pressure.
The Manchester, England-based construction firm said it expects its results for the first half of its financial year to be in line with its expectations. The first half of its financial year ended on December 31.
"This reflects a strong operational performance in the period despite inflationary pressure which the group remains confident it can continue to mitigate going forward," it added.
Kier said that during the period it won a series of new contracts, at rates which reflect its "bidding discipline and risk management."
At December 31, the company's order book is expected to be around GBP10.1 billion, up from GBP8.0 million a year earlier.
It added that it has secured revenue of over 90% for financial year 2023, providing a "high degree of visibility".
Looking ahead, Kier said it is confident in achieving medium-term targets, including revenue between GBP4.0 billion and GBP4.5 billion, adjusted operating profit margin of around 3.5% and cash conversion of operating profit of around 90%.
In financial year 2022, Kier reported revenue of GBP3.26 billion and an adjusted operating margin of 3.7%.
Further, the company said it continues to make progress towards its medium-term plan of achieving a sustainable net cash position. Net debt at 31 December 2022 is expected to be similar to 31 December 2021. Kier's net cash position at June 30, 2022, was GBP3 million.
"We expect to generate positive operating cashflow for the full year and deliver a net cash position at the year-end. The group is well positioned to continue benefiting from UK government infrastructure spending commitments and focused on the delivery of a sustainable net cash position and a sustainable dividend, in line with our medium-term value creation plan."
Kier expects to publish its results for the six months ended December 31 on March 9.
Shares in Kier were up 3.4% to 68.35 pence each in London on Thursday morning.
By Sophie Rose, Alliance News reporter
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