Kier Group works to reassure investors after Brexit vote

Property, residential, construction and services group Kier did its best to reassure investors over the company’s viability on Monday, in the wake of the EU referendum.

Since the announcement of its interim results on 17 March, the FTSE 250 group said its underlying trading performance has remained in line with management expectations.

It added that the EU referendum result has created some uncertainty, albeit with no impact on the business to date.

“The board, however, believes the group's breadth of activities and strong order books provide both visibility and resilience,” it explained in a statement.

“The acquisitions of May Gurney and Mouchel have significantly increased the level of visible, long-term earnings from our construction and services divisions.

“The property division has a healthy pipeline of projects totalling more than £1bn, largely comprising non-speculative schemes, and the residential division's mixed tenure business has a pipeline of over £600m,” the board added.

On the financial side, it said that following an improved cash performance, the group’s net debt position of less than £140m at 30 June was ahead of the forecast range of £150m - £170m.

The position included the cash expenditure of £44m on the Mouchel integration and £25m on new systems and upgrades.

Kier said its performance equated to a net debt to EBITDA ratio of less than one, which has been achieved a year ahead of its Vision 2020 goal of a net debt to EBITDA ratio of one by 30 June 2017.

“The group has recently concluded the raising of £82m of additional finance via the Schuldschein market,” the board said.

“The placement has an average maturity of approximately five years and a blended interest rate of approximately 3% including fees.

“This fundraising further diversifies the group's sources of funding and provides it with long-term, fixed-rate debt, thereby reducing the group's exposure to increases in interest rates over the longer-term.”