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Strong order books keep Kier on target to meet expectations

Kier is on course to hit its financial targets for the year, with a strong order book representing 95 per cent of forecast revenue for 2015.

In a trading update covering the period since 1 July, the group said that it was on course to achieve profit margins of 2 per cent for its construction division and 5 per cent for its services division.

The order book secured for the construction division - £2.6bn - accounts for 100 per cent of the division’s anticipated revenue for the current financial year.

Recent Kier Construction wins:

  • A place on the Highways Agency’s £1.15bn collaborative delivery framework over five years for schemes valued between £25m and £100m
  • Preferred bidder to build a new £57m mixed-use Argent development at Kings Cross, London
  • Preferred bidder to develop and construct a new headquarters for Total E&P UK in Aberdeen,
  • A £58m laboratory for the University of Cambridge on the Cambridge Biomedical Campus
  • A £57m design, build, finance and maintain package for South Ayrshire Council and Hub South West Scotland in Troon and Ayr
  • Preferred bidder for a £50m Knight Dragon high-rise residential block on the Greenwich Peninsula,London                                                                         
  • Awards of c£120m in Abu Dhabi; including a hotel and spa and a data centre

 

For the services division, the order book of £3.7bn, represents more than 90 per cent of targeted revenue for 2015. Contract wins for Kier Services since July 1st 2014 include:

Services wins:

  • A six-year £180m Canal & River Trust National Engineering & Construction Contract (NECC) for England and Wales
  • A five-year £100m contract with Bristol Water for network maintenance services, bringing awards under AMP6 bidding cycle to over £150m per annum
  • Preferred bidder for a two-year £14m contract with Severn Trent on the Asset Management Solutions (AMS) framework, with a possible five-year extension

 

The housing division’s progress was described as being ‘on track’, with 700 private housing completions expected by the end of the year. The mixed tenure and contracting businesses are expected to complete approximately 1,500 sales this financial year including 350 private sales.

The property division, with a development of more than £1bn, is trading in line with expectations, according to the statement.

Major projects include the £150m Solum Guildford project in joint venture with Network Rail, which has been submitted for planning. The site will cover 5.5 acres, comprising 445 homes and a mix of retail units, offices and ancillary facilities.

The division’s Watford Health Campus mixed-use scheme also received planning approval in September, providing for 375,000 sq ft of mixed-use development to the area, including 650 new homes.

In its annual results, covering the year to July 2014 and released in September, the group announced it had added £1bn of turnover following the acquisition of May Gurney, but pre-tax profits fell by 42.9 per cent.

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