Kier's construction orderbook at record high

Kier’s construction division has a record level of cash, but the group’s housebuilding operations report a deterioration in reservation levels - they are currently running 35% lower than at the same time in 2007.

Kier is one of the few hybrid groups with both construction and housebuilding divisions.

In today’s management statement, Kier said that the construction orderbook was at a record. Within this division:

• Kier Regional – strong flow of work in the education sector both on framework agreements and through traditional methods of procurement. The Kent Building Schools for the Future project will give an initial £100m of work with a potential for £150m more.
• Building Maintenance – strong pipeline of further contracts being bid for, including the ten-year contract for North Tyneside worth £60m a year where Kier is shortlisted.

Housebuilding is less rosy as “conditions have deteriorated further over the last two months” and margins are under pressure due to both volume reductions and a squeeze on selling prices.

However Kier points out: “the profits from our housing business continue to form a progressively smaller proportion of overall group profits before tax”.

Kier Property and Network Rail have formed a partnership and joint venture work will lead to the regeneration of stations. The first six in the portfolio are:

• Enfield Town
• Epsom
• Guildford
• Maidstone East
• Twickenham
• Walthamstow

They have a gross development value of more than £500m.