Equity Analysis /
United Kingdom

GB : Kier Group - Medium-term targets in sight

    Alex O’Hanlon
    Alex O’Hanlon

    Analyst - Support Services

    Joe Brent
    Joe Brent

    Analyst - Support Services & Special Situations

    CGS-CIMB
    25 March 2022
    Published by

    The H1 22 FDS EPS of 7.5p was 4% ahead of our estimates and EBIT margins of 3.5% reached the target level, helped by Property. We maintain our EPS estimates. We expect more volatility in input prices but believe this can be mitigated. Management’s medium-term targets suggest EBIT of c. £150m, which is 7% ahead of our FY 24 estimate. We maintain our FY 22 average net debt estimate of £190m, having increased it slightly after the January trading update. The order book has increased from the FY 21 level of £7.7bn to £8.0bn at H1 22, with strength elsewhere offsetting the loss of Area 9. The CMD in May should shed more light on the operational progress and balance sheet strength provides scope for accretive acquisitions. BUY, TP 150p and trading on a CY 22 PE of 4.9x.