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Kier to meet expectations with "robust" construction and services order books

Kier has reported that it is on course to meet expectations for its current financial year, with “robust” order books for its construction and services divisions.

In an interim management statement, the firm described its construction division as “resilient”, maintaining operating margins above 2 per cent.

Group revenue for the six months to December 2011 was £1.04 billion, 4 per cent down from the £1.1 bn for the same period in 2010. But pre-tax profit was 9 per cent up, at £34 million.

Kier said it had secured more than £400m of new work in construction during the period, with its order book covering its entire forecast revenue for 2012 and 80 per cent of revenue for 2013.

Education was a significant contributor of work, and Kier has been selected as preferred bidder on £100m of health projects via Procure 21+. It has also recently been chosen to design, build, finance and maintain nine fire stations for the London Fire Brigade.

Kier recently announced its acquistion of £15m of contract and a £20m from Stewart Milne, which it said in the IMS will support the growth of its Scotland construction business.

The firm’s services division was said to be trading “as predicted”, delivering the expected 4.5 per cent operating margin. Kier has secured more than £150m of work including the extension of its Harlow maintenance contracts and an environmental contract at Corby.

Kier also confirmed that its homes business is focused on developing mixed-tenure affordable Housing, and it will reduce its cash investment by developing its existing landbank. Its private housing business is expected to achieve more than 600 completions in the 2012 financial year, which the firm said was slightly ahead of forecast.

“With our strong balance sheet, our excellent track record of delivery and our great people, we remain well placed to win new work, particularly in our chosen growth markets, to strengthen the business both now and over the medium term,” the statement said.

Across the group, Kier is present on almost 90 frameworks, including the Ministry of Justice’s Northern regional framework and national framework for projects over £10m.

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