Share Price Reconstruction For Kier Group?
Spreadex | Sep 13, 2018 10:36
Can Kier Group (LON:KIE) reconstruct its stock price following next Thursday’s full year results?
It’s not been the best year to be in the construction and services sector. With the collapse of Carillion kicking off 2018, Kier got off to a wild start; opening at £10.52, January ended up taking 18 month lows of £9.20 and a 3 month peak of £11.62.
It continued to range between £9 and £11 across spring, only to settle into a more consistent decline from early summer onwards following a negative note from analysts at Barclays (LON:BARC). And having hit an £8.80 nadir not seen since late 2012 in mid-August, Kier Group PLC now sits at a current trading price of £9.61, with bearish bets against the company at a 4 year high according to data from IHS Markit Ltd.
Back in July the firm released a pretty important update in advance of next week’s full year reveal. There it announced the launch of an efficiency and streamlining programme, entitled ‘Future Proofing Kier’, and will crucially include ‘the disposal of non-core operations’, with the company’s renewed focus on infrastructure services, buildings, and developments and housing designed to deliver ‘an improvement in operating margins and cash generation’.
As for its financial performance, the firm’s average month-end net debt increased to £375 million, ‘reflecting reduced volumes due to bad weather’ impacting the Construction business, though Kier claimed that volumes had picked back up. The statement went on to say that underlying profit and earnings are forecast to be ‘in line with expectations’.
Whether or not Kier can spark a turnaround next week, then, will be dependent on how investors respond to the expanded details of that ‘Future Proofing’ plan on Thursday.
Kier Group PLC has a consensus rating of ‘Buy’ alongside an average target price of £14.96.
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