As year-end announcements go the trailing of £300 million in new contract awards at construction and services group Kier (KIE) is a lot better than a poke in the eye with a sharp stick. The market knows good news when it sees it, lifting stock in the £1.25 billion cap by 1.7% to £13.17.

The two extensions Kier secured to its existing Area 1 and 13 contracts with Highways England. Worth up to £90 million, they secure Kier's position as one of the dominant players in management and maintenance services for the UK agency, and as a strategic partner to local authorities.


The Mouchel acquisition (completed in June 2015) has obviously added significantly to Kier's capacity in the highways maintainence space and this acquisition demonstrates that the constructor's ability to make major deals that generate significant synergies – evidenced by its 2013 takeover of May Gurney – was no fluke.

Mouchel Consulting and Kier Business Services have also been awarded a £40 million four-year contract to deliver consultancy services for North Yorkshire County Council which will span a range of services including estates management, property projects and highways services. This contract starts in April 2016.


Furthermore, Kier has been awarded a seventeen-month extension up to March 2017 on the Area 13 contract covering Cumbria and North Lancashire. This contract covers 376 km of motorways and trunk roads across the region and provides the strategic road link with Scotland and the west coast.

The group has also been appointed preferred bidder for a £62 million health support services framework for NHS Yorkshire & Humber Clinical Commissioning Group (CCGs), in partnership with Dr Foster, BDO and Engine with Kier taking the lead in the consortium.

Issue Date: 16 Dec 2015