Update

 11 March 2019

KIER GROUP PLC

UPDATE

Kier Group plc (the "Company" or "the Group") today provides an update on the net debt position stated in its trading statement of 22 January 2019 and the Broadmoor Hospital redevelopment project.

The Group has revised its net debt position as at 31 December 2018 to £180.5m (from c.£130m) and, accordingly, has re-calculated its average month-end net debt for the six months ended 31 December 2018 as being c.£430m (from c.£370m).

In the course of preparing its FY19 interim results and finalising the 31 December 2018 net debt position, the Company identified a number of adjustments (in aggregate: £10.3m), principally relating to the Group's hedging activities, and has revised the classification of the debt (in aggregate: £40.2m) associated with certain Developments assets held for resale at 31 December 2018. The Group originally consolidated this debt balance within assets held for resale on its balance sheet; following the re-classification, the debt has been included within the Group's net debt position.

Of the £40.2m net debt, £9.8m relates to assets which have been sold since 1 January 2019, £14.1m relates to sales which are subject to binding sale agreements and expected to complete by 30 April 2019 and the balance of £16.3m relates to assets which are either being marketed for sale by 30 June 2019 or are under offer.

The Group continues to forecast a net cash position at 30 June 2019 and remains focused on reducing its average month-end net debt.

The Board has reviewed the operational progress and cost recovery programme of the Broadmoor Hospital redevelopment project. The first phase of the project is expected to be handed over shortly and the remaining work on the project, which accounts for less than 10% of its value, will commence shortly thereafter. The Group has recently agreed a process with the client which is designed to reach agreement with respect to the Group's entitlement to the additional costs associated with the project's delay. Following its most recent review, the Board has concluded that a non-underlying provision of £25m will be included in the Group's FY19 interim results in respect of future recoveries from the client and other third parties.

Whilst the Board notes the current political and economic uncertainty in the UK, and the implications for third party investment, the Group remains on course to meet its underlying FY19 expectations, with the full-year results being weighted towards the second-half of the financial year, as expected.

As previously announced, the Company will release its FY19 interim results on 20 March 2019.

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A conference call with Phil Cox (Executive Chairman) and Bev Dew (Finance Director) for analysts and investors will be held at 08.00 GMT today. Dial-in details are as follows:

This announcement contains inside information for the purposes of EU Regulation 596/2014. The person responsible for making this announcement on behalf of the Company is Hugh Raven, General Counsel and Company Secretary.

This announcement does not constitute an offer of securities by Kier Group plc (the "Company"). Nothing in this announcement is intended to be, or intended to be construed as, a profit forecast or a guide as to the performance, financial or otherwise, of the Company or any of its subsidiaries (together, the "Group") whether in the current or any future financial year. This announcement may include statements that are, or may be deemed to be, ''forward-looking statements''. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future and may be beyond the Company's or the Group's ability to control or predict. Forward-looking statements are not guarantees of future performance. You are advised to read the section headed ''Principal risks and uncertainties'' in the Company's Annual Report and Accounts for the year ended 30 June 2018 and the section of the Company's rights issue prospectus dated 30 November 2018 entitled "Risk factors" for a further discussion of the factors that could affect the Company's or the Group's future performance and the industry in which it operates.  Other than in accordance with its legal or regulatory obligations, the Company does not accept any obligation to update or revise publicly any forward-looking statement, whether as a result of new information, future events or otherwise.