Kier enjoys strong Q3 due to positive order book momentum

12th Nov 2014 09:51

Property, construction and services group Kier said it met expectations with its third quarter performance thanks to strength in its residential and services divisions.Its construction and services order books improved from £6.2bn in June last year to £6.3bn this year, which the company said represented more than 95% of forecast revenue for 2015."The level of new work continues to improve across the UK and we continue to manage the inflationary pressures in the sector," Kier said in a statement.The property division has a finance pipeline of £1bn with a return of capital target of 15%. The student accommodation market has improved since its joint venture with Amber Infrastructure, delivering up to three student accommodation schemes every year.Kier said it remained on track in its private housing business with 700 completions on their private lands, while its order book of secured and probable work at £2.6bn reflects the expected revenue for the year despite inflationary pressures in the sector.The group expects an increase in its net debt to increase by £80m because of investment in the property and residential divisions."Our business offers a broad range of capabilities which, when combined with a strong regional presence, creates a resilient operating platform, both in the UK, and as we continue to secure good quality opportunities internationally," the group wrote.Liberum analysts said the medium term outlook "remains very attractive" due to a "positive order book momentum", giving a 'buy' recommendation and a £19.15 target price.Shares were down 0.47% to £14.80 at 10:36 on Wednesday.