The Courier & Advertiser (Angus and Dundee)
Kier distances itself from Carillion woe
Shares in construction group Kier jumped by nearly a fifth after it offered reassurance over trading in the wake of Carillion’s collapse.
The firm, which has a strong presence in Scotland and in November picked up a £34.5 million government-backed contract to build a new elective care unit at the Golden Jubilee Hospital in Clydebank, has suffered hefty stock market swings since rival and joint venture partner Carillion went to the wall earlier this month.
However, Kier’s shares spiked 18% in morning trading in London after the group confirmed it remains on track for double-digit annual profit growth this year.
It added that contracts taken over from Carillion are “performing well, operationally and financially”.
They include responsibility with partner Eiffage for the delivery of the UK’S flagship HS2 rail project.
“Our first-half performance continues to demonstrate the strength and stability of the business and the benefits of our client-focused strategy,” chief executive Haydn Mursell said.
“The group remains on course to deliver double-digit profit growth in the current year and to achieve its Vision 2020 targets.”
Kier said net debt would be higher than a year earlier – at £230m to £240m against £179m a year ago – because of investment in its property and residential arm.
Its order book stands at £9.5 billion, with 100% of forecasted revenue for the current financial year already secured.
Kier sought to reassure investors last week in the immediate aftermath of the Carillion collapse that it had contingency plans in place for its joint ventures with the failed group and does not expect to take a financial hit.
But that did not stop shares being hit by volatility in the days that followed.
Kier stock closed up 146.50p at 1,104.00 last night.
Rival Interserve has also been shaken by Carillion’s demise with reports last week its financial health was being monitored by government.