Kier Group plc, the integrated construction, services and property group, has announced that its order book now stands at £2.2 billion with the publication today of its Interim Management Statement covering the period from 1 July 2013 to date.
In construction, Kier said it had maintained a strong position with over £450m of awards since 1 July 2013, much of which has comes through framework agreements. The order book of secured or probable work, at £2.2bn, represents 100% of the forecast revenue for the current financial year, ahead of the equivalent position last year. The statement said that the availability of new work is continuing continuing to increase.
At approximately 2%, the Group’s construction operating margins remain in line with expectations for this financial year, The Board is continuing to closely manage working capital, particularly across public sector contracts and framework arrangements, where payment terms remain challenging.
Kier said that confirmation at the end of October that the UK Government has concluded its discussions with EDF Energy with respect to Hinkley Point C nuclear power station was encouraging. The news has provided greater clarity that Kier’s contract for site preparation works, valued at over £100m and announced last year, will begin in 2014.
In Services, following the completion of its May Gurney acquisition in July, the Group has secured new work of more than £300m, underpinning the £3.6bn order book. This provides visibility of revenues beyond 2020, with 95% of forecast Services revenue for the current financial year secured or probable.
Operating margins in the Division remain in line with expectations for the financial year, at approximately 4.5%, reflecting a combination of Kier Services and May Gurney’s trading and the forecast cost savings arising from the acquisition. The integration of May Gurney is continuing, with Kier remaining on track to deliver the forecast £5m of cost savings for this financial year.
The Group said its order books in Construction and Services are robust and its performance is in line with the Board’s expectations. However, although the Group said it was encouraged by the signs of economic growth, it was also experiencing inflationary cost pressures, particularly in the construction businesses.
The firm said it continues to be on course to meet the Board’s expectations for the current financial year.
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