UK's Kier FY profit beats on strong order book
(Adds details from statement, analyst quote)
Sept 20 (Reuters) - British construction and services
company Kier Group said on Thursday a hefty order book
lifted its underlying full-year pretax profit 9 percent, which
was higher than expected.
Underlying pretax profit rose to 137 million pounds ($180.1
million) in the year to June, from 126 million pounds a year
earlier, said Kier, which works in sectors including defence,
housing and mining in the UK, Australia, New Zealand and the
Analysts expected underlying pretax profit of 130.01 million
pounds, according to Thomson Reuters I/B/E/S.
Kier, which launched a cost-savings plan in July including
the sale of non-core assets, said it expected profit and cash
flow improvements of at least 20 million pounds in its full-year
2020, with proceeds of 30 million pounds to 50 million pounds
from the disposals.
Helped by demand in its construction and services
businesses, Kier's order book was worth about 10.2 billion
pounds at the end of June, up from 8.9 billion pounds a year
earlier, it said.
Kier, whose activities range from building power stations to
outsourcing work for local councils, said it had seen
"significant turbulence" in its markets during the year.
"There remain many moving parts and many strings to Kier's
bow and all are moving in the right direction ... that
construction did not move backwards is a good result in our view
given the current challenges in the UK construction markets,"
Jefferies analyst Anthony Codling said.
Britain's economy has slowed in the two years since June
2016's Brexit vote and construction activity slowed in August
after reaching a two-year high the month before, as builders
worked their way through projects delayed by bad weather earlier
in the year, industry data from financial data company IHS
Kier said it acquired a greater share of the contract to
build Britain's High Speed 2 railway and the Highways England's
Smart Motorways programme after the high profile collapse of
outsourcing firm Carillion.
Big government contractors like Kier have faced unflattering
comparisons from investors with collapsed outsourcing firm
($1 = 0.7609 pounds)
(Reporting by Noor Zainab Hussain in Bengaluru; Editing by
First Published: 2018-09-20 08:20:27
Updated 2018-09-20 08:50:39
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