Kier Group posts revenue fall in line with forecast

Construction firm Kier Group reported a seven per cent fall in half-year revenues in line with expectations as the UK building sector grappled difficult market conditions.

Total revenue for the six months ended December 31st 2012 came to £976m, compared to £1.0bn for the same period a year earlier.

Underlying pre-tax profits fell to £27.0m, a 20% drop from £34m in 2011.

The results reflected a slump in demand for UK building during the economic crisis and an exceptional charge of £4.4m (2011:nil) for the restructuring of the business.

"As we are exposed to today's difficult environment, particularly in UK building, we are taking steps to restructure the business to reflect the scale of future opportunities," Chief Executive Officer Paul Sheffield said.

"This restructuring will continue through the second half of the financial year."

However, the order book for construction only fell slightly from £2.2bn in 2011 to £2.1bn while services remained at £2.1bn following about £800 worth of awards during the period.

Construction and services order books are expected to meet revenue targets for the next half.

"We are encouraged by the opportunities arising in our infrastructure and overseas Construction operations," Sheffield added.

"In addition our services businesses continue to diversify providing a strong platform for growth."

A dividend of 21.5p per share, was unchanged from the previous year.

Shares fell 2.30% to 1,315.00p at 09:19 Thursday.

RD