Westhouse Securities – Kier Group trading statement encouraging

Westhouse Securities stated:

“Kier’s trading statement was encouraging, “on course” for the year to June 2014 and with “good visibility of earnings” for 2015. Margins appear to be in line with our estimates and the outlook continues to improve in most markets. We remain happy with our forecasts. The Capital Markets Day tomorrow should provide further encouragement, we believe.

Performance on track and good visibility

The hybrid construction, property and services group remains on course for the year to June and, importantly, has good visibility of earnings for next year. It is encouraged by its “strong” pipeline of opportunities, which backs our view that the construction market in particular is recovering strongly.

Construction “encouraging”

The division now has in place 90% of budgeted workload for next year. Margins are currently “around 2%”, while we are on 2.1% for 2014E. The UK appears to be strengthening, while there are “good quality” opportunities overseas, particularly in the Middle East.

Capital Markets Day should demonstrate group’s unique offering

We continue to believe that Kier presents a unique and inter-related breadth of services. This is not always fully appreciated, in our view, but we believe the company will demonstrate these well at tomorrow afternoon’s Capital Markets Day and this may provide a positive catalyst for the shares.”