Contracts for schools scheme boosts Kier

Nov 10 2009 by Peter McCusker, The Journal

CONSTRUCTION and housebuilding firm Kier said a raft of public sector work was helping it ride out recession after a "good start" to its financial year.

Since July the company has landed £250m in work under the Building Schools for the Future scheme after wins from councils in Bolton and Telford & Wrekin as well as £70m in health projects.

The firm added that the private housing market had “stabilised” while its fast-growing support services business has a “long list of potential new contracts”.

Bedfordshire-based Kier’s strong start comes despite a £17.9m fine from the Office of Fair Trading for anti-competitive practices – the largest individual penalty among fines totalling £129.5m for 103 firms.

Kier is looking at contesting the decision and has until November 22 to lodge its appeal.

Kier has also pre-qualified for early contracts on the Crossrail east-west London rail link and is bidding for similar work in Hong Kong.

The company’s housebuilding business has secured almost three-quarters of its planned sales for the year in completions and orders so far.

Although Kier said the housing market was improving with house price rises in some areas, it warned the recovery would remain “fragile” due to a lack of mortgages, particularly among first-time buyers who have been hit with higher rates and the need for bigger deposits.