Kier Group plc (KIE) is a construction and property development company specialised in residential and commercial property development and infrastructure project investment. The company caters its services to various sectors including utilities, power, housing, defence, institutional, commercial, education and industrial sectors. Woodford Investment Management Ltd, Aberdeen Standard Investments and BlackRock Advisors (UK) Ltd are the top institutional investors in the company. (Source: Thomson Reuters)
On April 15, 2019, the group confirmed that Andrew Davies had joined the Kier Group Plc as Chief Executive and the ex-Chief Philip Cox has resumed the chair of Non-Executive Chairman. The group has said that its newly appointed Chief Executive Andrew Davies will conduct a strategic review of the company and will analyse methods to cut debts and respond to hurdles troubling the wider outsourcing industry.
Post this announcement, the shares of Kier Group Plc have surged 7.76% or 27 points to GBX 375 (as on April 16, 2019), before the market closed.
Daily Price Chart (as on April 16, 2019), before the market close. (Source: Thomson Reuters)
At the time of writing (as on April 16, 2019, at 09:25 AM GMT), shares of Kier Group Plc were quoting at GBX 375.80 and added 0.21% against its previous day close. In past one-year, shares have registered a 52w high of GBX 1,109.47 and a 52w low of GBX 319.40 and at the current price level, shares were trading 66.20% below its 52w high price level and 17.41% above its 52w low level. Also, from the simple moving average standpoint, shares were trading below its 30-day, 60-day and 200-day's simple moving average price, which indicates a long term downtrend in the stock price.
However, the stock has a dividend yield of 13.36% which is considerably above the industry dividend yield and broader index FTSE 100 dividend yield. The outstanding market capitalisation of the company stood at £607.19 mn, which ranks it among the small-cap category.
Stock’s 5-day average volume traded on the London Stock Exchange was 32.88% below its 30-day average daily volume traded on the London Stock Exchange.
H1 FY19 – Financial Performance
Underlying Revenue for H1 FY19 rose by 2 per cent to £2,201.5 million ascompared with £2,149.9 million in H1 FY18. Revenue from Infrastructure services increased by 8% and revenue from the Building segment surged by 10%, but revenue from Developments & Housing's segment plunged by 19%. The Group's underlying operating profit was £51.8 million for H1 FY19 and decreased by 15% as compared to the last year data mainly on account of net costs of £10 million relating to the implementation of the FPK (Future Proofing Kier) programme.
The company’s wide range of end-user markets, operational performance and order backlog are its key strengths, even as liquidity position remains a cause for concern. However, cost overruns, increasing manpower costs in the UK and intense competition could impact the company’s performance. Kier Group Plc gross margin for FY18 stood at 9.5% which was significantly below the industry average of 32.2%, and EBITDA margin stood at 3.4% against the industry average of 6.1%.
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