Kier on track for full-year as signs of recovery continue

13th Nov 2013 07:03

- On course for full-year targets- Construction and Services divisions are robust - Signs of economic growth but experiencing inflationary pressures Construction, services and property firm Kier Group said it remains on course to meet company expectations for the current financial year but, while it is encouraged by signs of economic growth, it is experiencing inflationary cost pressures, particularly in its Construction businesses.The FTSE 250-listed firm, which is a contractor for the £15bn Crossrail projects, said order books in Construction and Services are robust and are performing in line with its own forecasts."We have maintained our strong position with over £450m of awards since July 1st, much of which 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, which is ahead of the equivalent position last year, and the availability of new work continues to increase," the group said in a statement.It said operating margins remain in line with expectations for this financial year, at approximately 2%. "We continue to closely manage working capital, particularly across public sector contracts and framework arrangements, where payment terms remain challenging," it added.In Services, the group said it has secured new work of more than £300m, underpinning the £3.6bn order book, providing visibility of revenues beyond 2020, with 95% of forecast Services revenue for the current financial year secured or probable. Operating margins, at approximately 4.5%, remain in line with company expectations for this financial year.The Property division has a combined £1.5bn housing and development pipeline. "Occupier and investor activity in the market is improving and the business is pursuing an increased number of opportunities. It continues to target a 15% return on capital, while also generating revenues for our Construction and Services divisions."We remain focused on ensuring that the enlarged business delivers the forecast cost savings, which will underpin our performance in the medium term," it said.CJ