Construction giant slashes debt
PROPERTY, residential, construction and services company Kier Group, has performed better than expected to reduce its net debt to £175m at the end of December.
The company, which employs more than 1,000 people in offices in Manchester, Liverpool, Oldham and Wigan, had expected its deficit to rise to about £220m by the end of 2015 but has surpassed that initial forecast.
Its position has been helped, it says, by the settlement of a number of final accounts and reflects an improved working capital performance.
“It is anticipated that this will continue and therefore the Group’s net debt position at June 30 will be at the lower end of previous guidance,” a statement said.
“The Group remains on course to achieve its Vision 2020 goal of a net-debt-to EBITDA ratio of 1:1 by June 2017.”
Meanwhile, its services division is having ann increased presence in the highways and infrastructure sectors, with Kier playing a leading role in flood protection and restoration initiatives, particularly following the recent bad weather.
For example, Kier has been appointed preferred bidder by Highways England to undertake £2m works to re-open the A591 in Cumbria.
The company has also been shortlisted to tender for all three HS2 phase 1 £900m Enabling Works Contract packages as part of a joint venture with Carillion and Eiffage. Contract award is scheduled for the end of 2016, with works scheduled to commence in early 2017.
Kier said the integration of Mouchel, acquired in June 2015, is progressing well.
“The Group continues to experience good underlying organic growth and an improving pipeline of opportunities, despite the ongoing pressure on public sector budgets,” the statement contined.
“The combined Construction and Services order book, as at December 31 2015, has been maintained at approximately £9bn, excluding potential further renewals and extensions valued in excess of £3bn.”
