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UK construction and support services group Kier said eurozone uncertainty is hurting business confidence in the UK but added n a trading statement that it was still on track to meet expectations.
“There is no doubt that the issues in Europe are weighing heavily on everyone,” said Paul Sheffield, chief executive.
“In our industry, we need people to have confidence to invest in their daily lives. A company looking to expand needs to know they are growing and property developers need to know there will be end users,” he added.
In the period from July 1 to November 15, the company reported that its construction division had brought in £400m of new work with 96 per cent of planned revenues for the year ending next June now secured. As a result, it said that the division’s operating margins would be kept “firmly above 2 per cent”.
In its support services division, the company said it was confident margins would remain above 4.5 per cent after winning a £750m long-term project in September under the UK government’s SCAPE national minor works framework.
Shares of the FTSE 250 company have risen13 per cent since September when the company announced that it planned to double its support services business.
But a growing number of construction companies entering the market for outsourced council house maintenance contracts has increased competition, Mr Sheffield said.
“In what remain very tough times in the UK, Kier continue to demonstrate the depth of its qualities with its performance,” said Andy Brown at Panmure Gordon. “With the local market uncertainty, our stock preference favours companies with a stronger international favour,” he said while recommending a neutral outlook for shares in the company.
Shares were trading down 34p at 1363p ahead of the company’s annual meeting on Wednesday.