1st Aug 2006 13:30
Kier Group PLC01 August 2006 1 August 2006 ACQUISITION OF HOUSEBUILDER FOR £53.3m Kier Group plc, the major construction, support services, homes and propertygroup announces that it has acquired Hugh Bourn Developments (Wragby) Limited(the 'Company'), a regional housebuilder operating in north Lincolnshire. Kier Homes Northern Limited (a wholly owned subsidiary of Kier Residential) hasacquired the entire issued share capital of the Company from the Bourn familyfor £53.3m representing the market value of land, work in progress and otherassets and liabilities. The consideration will be funded from Kier's cashbalances and banking facilities with £20m paid on completion and the balance duein equal instalments on 2 July 2007 and 1 July 2008. The Company is a well established regional housebuilder having operated inLincolnshire for over 30 years and will form the foundation for a fifth divisionof Kier Group's residential business, expanding its reach to the north ofAllison Homes' existing operations. The majority of the 1,197 residential plotsacquired with the business benefit from a combination of outline and detailedplanning consent and include a small number of built and partially built units.In its first year the Company is expected to trade from 21 trading outlets andis expected to be earnings enhancing to the Group. Commenting on the transaction, John Dodds, Chief Executive said: "This acquisition provides us with an excellent opportunity to further expandour housing division by providing the basis for a new region to complement ourfour existing, successful, regional housebuilding businesses. Buying land offmarket in this way has proved very successful in past acquisitions and Ianticipate that this transaction will provide a return on our investment in thefirst year." Kier Group will be announcing its full year results to 30 June 2006 on 14September 2006. - ENDS - For further information, please contact: John Dodds, Chief ExecutiveKier Group plc Tel: 01767 640111 Deena Mattar, Finance DirectorKier Group plc Tel: 01767 640111 Caroline SturdyMadano Partnership Tel: 020 7593 4000 Notes on Hugh Bourn Developments (Wragby) Limited: Hugh Bourn Developments (Wragby) Limited ('the Company') disclosed a profitbefore taxation for the year ended 31 March 2006 of £4.2m based on the historicbook value of land. At 31 March 2006 the gross assets of the Company were £29.9m. The largest assetcategory by class is the land bank which is accounted for at the lower of costand net realisable value. Kier Group intends to consolidate the net assets ofthe Company at fair value which the Board expects to approximate to the purchaseconsideration. Kier Group will therefore report operating margins, in respect of the Company,based on the fair value of land. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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