Firm confirms £350m proceeds from sale of housing arm and equity raise have now been received
Kier has said it expects its full-year results to be ahead of expectations when the firm releases its annual figures this September.
In a trading update this morning, the contractor said its adjusted operating margin for the year to June would be around 3% with the firm saying that it is on track to meet its medium-term target of 3.5% on revenue of between £4bn and £4.5bn.
The firm, which has recently won a place on the government’s £1bn New Prisons Programme as well as a £50m highways and utility diversions contract on phase 2b of HS2, said it had raked in £350m from the sale of Kier Living in April for £110m and an equity raise, completed in nine hours earlier this summer, which it said meant its year-end net debt and cash position would be better than previous expectations.
It added: “Trading since the announcement of our half year results continued to be resilient and consequently the group’s full year results are anticipated to be moderately ahead of the Board’s expectations.”
It said average month-end net debt would be at a similar level to the £436m recorded in 2020 because the proceeds of the sale of Living and the equity raise had only arrived in the last few months of the financial year.
Chief executive Andrew Davies said: “The group’s proven track record of delivery and focus on selected markets, coupled with its strong order book and strengthened balance sheet, gives the Board confidence in our strategy and the continued success of the group.”
Cenkos analyst Kevin Cammack said: “Kier’s pre-close trading statement gives some comfort that the group has finally and decisively turned the corner and that investors can concentrate fully on looking ahead and not backwards.”
Kier will unveil its full year results on 16 September.
Meanwhile, the firm is one of four bidding for a £50m scheme to build new affordable housing at the TV Centre scheme in west London.
The job is being developed by Stanhope, Mitsui Fudosan and AIMCo which exchanged contracts with Peabody earlier this year for 142 homes in two new buildings at the site.
The other bidders are Wates, Ellmers and McLaren. Others working on the scheme include QS Core 5 and M&E and structural engineer Arup.
Designed by Maccreanor Lavington Architects, the new buildings will replace the existing former BBC multi-storey car park on Wood Lane opposite the Westfield shopping centre.
A winner is due later this year with work starting next year for completion in 2024.