Source - SMW
Kier said it remains on track to deliver double digit profit growth after trading in line with management's expectations in the six months to the end of December.

The property, residential, construction and services group also said it had concluded its two-year portfolio simplification programme, in line with previous guidance. 

Kier said the property and residential divisions were delivering on their ROCE targets and operating margins had been maintained in the construction and services divisions.

It added: 'As anticipated, investment in property and residential led to an increase in average net debt during the period. 

'Capital employed in these divisions is now at the target level for the purposes of Vision 2020 targets. 

'We therefore expect net debt to EBITDA to be less than 1x at 30 June 2018 and for the group's year-end and average net debt position to reduce over the period to 2020.'  

The group said its net debt position for the six months ended 31 Dec would be in the range of £230m-£240m (31 Dec 2016: £179m), including the £24m cost and acquired debt of McNicholas, with an average month-end net debt position for the period of c.£350m (31 Dec 2016: £300m). 

The group said its net debt position was underpinned by its property and residential assets of c.£500m.

It added: 'The combined construction and services order books remain strong at c.£9.5bn, with 100% of forecast revenue for the 2018 financial year secured, providing good visibility. 

'In addition, our highways business is currently in negotiation with Highways England for three-year extensions to its Area 3 and 9 contracts, with a final decision expected by the end of March 2018. 

'The McNicholas acquisition is performing well and provides a highly complementary addition to our utilities services business, as highlighted in our recent contracts announcement.

'Following our announcement on 15 Jan, Kier and Eiffage have taken over responsibility for the HS2 joint venture and Kier is assuming full responsibility for the Highways England smart motorways schemes on which it has been working in joint venture with Carillion. 

'The above contracts are all performing well, operationally and financially.'   

Chief executive Haydn Mursell said: 'Our first half performance continues to demonstrate the strength and stability of the business and the benefits of our client focused strategy. 

'We have leading market positions in infrastructure services, building and development which provide the platform to support further growth and position the group well for the future. 

'The group remains on course to deliver double digit profit growth in the current year and to achieve its Vision 2020 targets.'