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Kier says Mouchel integration 'progressing well' in trading update

Kier’s construction arm has said it expects to experience continued growth following a number of contract wins in the past 12 months.

In a trading update to the City, the group said its construction business was continuing to experience year-on-year organic growth of 20 per cent and would hit targets for the year ending 30 June 2015.

Kier, which expanded its order book to £9.3bn following the purchase of infrastructure group Mouchel, said the integration of the two businesses was “progressing well” and that it was experiencing a “smooth transition” in operational management.

Recent wins for Kier’s construction arm included a place on all three lots of the £4bn Southern Construction Framework, securing more than £200m of contracts under the ProCure21+ health framework and being named as the preferred bidder to deliver the first phase of the £170m Ram Brewery regeneration in Wandsworth in April.

It was also re-appointed to the North West Construction Hub medium-value framework for work between £2m and £9m.

The group said its construction order book included “secured or probable work” likely to represent more than 80 per cent of its anticipated revenue for the year ending 30 June 2016.

Kier Group chief executive Haydn Mursell said: “We are putting out a strong trading update today from across the group, which mirrors the more buoyant conditions being seen across the construction industry.  

“The integration of Mouchel is progressing well.

“Following the acquisition, the group has an enlarged order book of £9.3bn and with 80 per cent of anticipated construction revenues for next year being secured or probable revenue, these are excellent indicators of Kier’s potential for future growth.  

“However, order book success has not just been based on acquisitive activity; we are experiencing strong organic growth in our construction division, while still maintaining some of the strongest margins in the sector.”

Kier also said it expected to meet targets in its property, residential and services businesses.

The last 12 months has seen Kier complete approximately 2,100 housing private housing and mixed-tenure units, while a “buoyant” property development market has created a pipeline of opportunities in excess of £1bn.

In services, the company says its purchase of Mouchel means it is maintaining nearly a third of all of the UK’s highways.

It has also benefited from a £200m highways maintenance contract from Northamptonshire County Council and secured £700m of work as part of the AMP6 cycle.

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