THIS ANNOUNCEMENT CONTAINS INSIDE
INFORMATION
21
January 2025
Kier Group
plc
Trading
Update;
Trading in line and £20m
Share Buyback Programme announced
Kier Group plc ("Kier" or the
"Group"), a leading infrastructure services, construction and
property group issues a trading update for the six months ended 31
December 2024 ("the period" or "first half"). The Group will
publish its results for the six months ended 31 December 2024
("half year results") on 11 March 2025.
Trading
Consistent with the AGM trading
update in November 2024, the Group continued to trade well and in
line with the Board's expectations in the first half of the current
financial year. Similar to last year, the Group's performance is
expected to be second-half weighted.
Order book
The order book as at 31 December
2024 was c.£11bn, a c.2% increase on the year-end position (30 June
2024: £10.8bn) and c.3% above the prior year comparative (31
December 2023: £10.7bn). The Group has secured revenue of over 95%
for FY25, providing a high degree of visibility. Long-term
framework positions are excluded from the order book and represent
an additional opportunity. Bidding discipline and risk management
embedded across the business continue to drive the high quality and
profitable order book.
Recent awards include:
· Infrastructure Services:
o Natural Resources, Nuclear & Networks: appointed by
Yorkshire Water to their £850m AMP8 (2025-2030) Complex
Non-Infrastructure Works Framework to support their investment in
water processing and waste networks.
· Construction:
o Awarded place on the 4 year £500m NHS Shared Business Services
Decarbonisation of Estates framework to support the NHS reduce the
carbon footprint of its estate.
o Awarded a £240m contract by the Ministry of Defence under the
Defence Estate Optimisation Portfolio to design and build new
accommodation at Keogh Barracks.
o Kier Places: awarded a place on the £814m Facilities
Management framework by Pagabo to provide a range of services to
various public sector organisations including, education,
healthcare and local authorities.
We continue to believe that as a
strategic supplier to key areas of the new Government's priorities,
including transport, education, healthcare, justice, defence and
nuclear, there are significant medium term growth opportunities for
the Group. Alongside these we should also further benefit from the
very substantial investment plans being announced in regulated
industries, notably water.
Net
cash / debt
De-leveraging continues to be in
line with the Board's expectations reflecting a maintained focus on
operational delivery and cash management with average month-end net
debt of c.£(38)m (HY24: £(136.5)m).
Kier is expected to report a net
cash position as at 31 December 2024 which will be above the prior
year comparative period (HY24: £17m).
Share buyback
The Group has clear, disciplined
capital allocation priorities, which are continuously reviewed by
the Board with the objective of maximising shareholder value. The
Group has demonstrated strong cash generation over the last few
years, which has resulted in the substantial de-gearing of the
balance sheet and facilitated a resumption of dividend payments
during FY24. The Group's current trading reflects a continuation of
these positive trends, and having reviewed the Group's ongoing
capital requirements the Board has approved an initial share
buyback of £20m.
Full details, including confirmation
of the launch of the share buyback programme will be contained in a
separate announcement today.
Capital allocation
As noted above, and consistent with
our capital allocation priorities, we are announcing a share
buyback programme alongside our dividend policy reflecting our aim
to maximise shareholder returns.
The Group's capital allocation
priorities, which remain largely unchanged, are:
·
Capex - ongoing investment to
support the business
·
Ordinary
Dividend - targeting a dividend
cover of circa 3x earnings through the cycle
·
Investment in
Property - disciplined investment in
the Property segment. ROCE target of 15% with up to £225m of
capital deployed
·
Mergers and
acquisitions - the Group will
consider value accretive acquisitions in core markets
If the Group has any remaining
unallocated capital the Group has committed to returning this
excess capital to shareholders.
·
Incremental
Shareholder returns - initial share
buyback programme of £20m commencing
immediately
The Group's capital allocation is
underpinned by its commitment to maintain a strong balance sheet
with an average month-end net cash position
Andrew Davies, Chief Executive of Kier,
commented:
"Kier has delivered a strong first half performance, in line
with our expectations. The strength of our cash generation combined
with the multi-year revenue visibility afforded by our growing
quality order book and underpinned by our strong balance sheet,
gives us the confidence that this momentum will
continue.
"We continue to be well positioned to benefit from UK
Government and regulated industry infrastructure spending plans
into areas where Kier offers market leading services, notably
transport, education, healthcare, justice, defence, nuclear and
water.
"Given our order book growth combined with our continued
de-levering and greater confidence that we will achieve an average
month-end net cash position, we have announced today a £20m share
buyback, as part of our evolved capital allocation policy to
maximise shareholder returns."
Capital Markets Event
Kier Group plc will be hosting a
Capital Markets Event for analysts and institutional investors on 3
June 2025.
The in-person event will be hosted
by Andrew Davies, CEO and Simon Kesterton, CFO, and will include
presentations from our Group Managing Directors of our core
business divisions.
Details will be announced closer to
the time.
Inside Information
The information relating to the
share buyback programme in this announcement constitutes inside
information as stipulated under the Market Abuse Regulation (EU)
No.596/2014 (as it forms part of UK domestic law by virtue of the
European Union (Withdrawal) Act 2018, as amended). On the
publication of this announcement via a Regulatory Information
Service, such information is now considered to be in the public
domain. The person responsible for arranging for the release of
this announcement on behalf of the Company is Jaime Tham, Company
Secretary.
- ENDS -
For
further information, please contact:
|
Investor Relations
|
+44 (0)7933 388 746
|
|
Kier Press Office
|
+44 (0)1767 355 096
|
|
Richard Mountain, FTI
Consulting
|
+44 (0) 7909
684466
|
About Kier Group plc
Kier is a
leading UK infrastructure services, construction and
property group. We provide specialist design and build capabilities
and the knowledge, skills and intellectual capital of our people to
ensure we are able to project manage and integrate all aspects of a
project.
This announcement does not
constitute an offer of securities by Kier Group plc (the
"Company"). Nothing in this announcement is intended to be, or
intended to be construed as, a profit forecast or a guide as to the
performance, financial or otherwise, of the Company or any of its
subsidiaries (together, the "Group") whether in the current or any
future financial year. This announcement may include statements
that are, or may be deemed to be, ''forward-looking statements''.
By their nature, forward-looking statements involve risks and
uncertainties because they relate to events and depend on
circumstances that may or may not occur in the future and may be
beyond the Company's or the Group's ability to control or predict.
Forward-looking statements are not guarantees of future
performance. You are advised to read the section headed ''Principal
risks and uncertainties'' in the Company's Annual Report and
Accounts for the year ended 30 June 2024 for a further discussion
of the factors that could affect the Company's or the Group's
future performance and the industry in which it operates.
Other than in accordance with its legal or regulatory obligations,
the Company does not accept any obligation to update or revise
publicly any forward-looking statement, whether as a result of new
information, future events or otherwise.
