SANDY: Building firm Kier Group cheered markets with signs of revival in commercial building markets as it flagged up annual profits at the top end of market hopes.
Kier expects its full year results to be at the upper end of forecasts, supported by a record net cash position, and said business in the private sector was rebounding.
The upbeat comments, which lifted shares almost 4%, are welcome after gloom in the sector last week as the government took the axe to the Building Schools for the Future project. Kier is braced for further cuts but said its exposure to the BSF project was not "material".
Keir said it had secured high volumes of work and added that previously mothballed private commercial projects were being resurrected as funding becomes available.
Net cash ending the financial year was over £170m and Keir has secured nearly 90% of its targeted revenue for next year on its order book, the company said in a statement today. "Whilst we continue to operate in a challenging environment, our integrated business model provides us with the ability to seek out and create new opportunities."
The firm also carries out building maintenance services on around 240 000 homes for clients including local authorities and housing associations, with long-term visibility over revenues to 2020.
Although council budgets are likely to come under pressure, Kier highlighted a "strong pipeline" and is bidding for a number of major contracts with clients in Warwickshire, Rotherham, Tower Hamlets and Lewisham in London, Epping Forest, North East Lincolnshire, and Braintree in Essex.
Kier's house building arm traded "broadly" in line with hopes, selling 1,060 homes in the year to June, 7% down on the previous year.
