Kier tum­bles after re­veal­ing cash plea

The Daily Telegraph - Business - - Business - Louis ash­worth

SHARES in con­struc­tion ser­vices com­pany Kier Group suf­fered their sharpest fall since March after the group re­vealed it is con­sid­er­ing an equity raise.

Its slipped as much as 15pc, the most since late March, be­fore pulling back later in the day to close down 7.6p to 90p. Ex­pec­ta­tions of in­creased Gov­ern­ment spend­ing on in­fra­struc­ture had sent its shares up on Mon­day.

The group re-em­pha­sised in an an­nounce­ment yes­ter­day that it should ben­e­fit from Boris John­son’s “build, build, build” pledge – even though the prom­ise does not have a lot of money be­hind it.

In an up­date to the City, Kier noted it was “well-placed” to ben­e­fit as a key sup­plier to the De­part­ment for Ed­u­ca­tion.

It con­firmed that trad­ing since its last up­date at the end of March had been in line with ex­pec­ta­tions, and said its or­der book gives it con­fi­dence in its out­look for the new fi­nan­cial year.

Kier said more steps may need to be taken in the medium term, how­ever, in­clud­ing po­ten­tially rais­ing money from the mar­kets.

Liberum’s Joe Brent said the up­date showed Kier’s “un­der­ly­ing re­silience”, de­spite an ex­pected hit from costs re­lated to Covid-19.

The FTSE 100 had a poor ses­sion, spend­ing most of the first day of the sec­ond half in the red, be­fore claw­ing its way back to trad­ing flat at the close.

Med­i­cal tech­nol­ogy maker Smith & Nephew led blue-chip ris­ers after re­port­ing a steady im­prove­ment in its trad­ing per­for­mance.

The group said it ex­pects un­der­ly­ing rev­enue to drop 29pc in the sec­ond quar­ter, but said it is has un­der­gone an im­prove­ment in re­cent months.

Its rev­enues have bounced back steadily since their April nadir – though they re­main down. Shore Cap­i­tal’s Tara Raveen­dran said the ex­pected fall was “con­sis­tent with prior ex­pec­ta­tions”, but said the progress on rev­enue was en­cour­ag­ing. The group’s shares rose 75p to £15.81.

Premier Inn owner Whit­bread and food ser­vices group Com­pass were lifted after be­ing named Credit Suisse’s new top picks for the ho­tel and cater­ing sec­tor re­spec­tively. Whit­bread rose 31p to £22.53, while Com­pass climbed 27p to £11.39.

The FTSE 250 out­per­formed its large-cap sib­ling. B&M Euro­pean Re­tail jumped 19.5p to 417p after re­port­ing first quar­ter sales that beat an­a­lysts’ es­ti­mates.

Citi’s Adam Cochrane praised the re­sults, but said the group may strug­gle to ex­pand fur­ther with­out an on­line of­fer­ing.

He added: “This may re­flect the peak for the cur­rent year with a de­cline from this point.”

The big­gest faller among the mid-caps was John Laing Group, which fell 36.6p to 311.8p after not­ing lower power prices were hit­ting the value of its re­new­able en­ergy as­sets.

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