Kier Plc Announced Its Trading Update And OutlookFor FY2019

Kier Group Plc (KIE) is a construction and property development company specialized in residential and commercial property development and infrastructure project investment. The company’s services portfolio includes construction and civil engineering, support services, property development, asset management, house management, building, mechanical and electric design, project management, pre-construction, engineering design, refurbishments, interiors, 3D modelling, technical, rail, installation services and private finance initiatives. The company caters its services to various sectors including utilities, power, housing, defence, institutional, commercial, education and industrial sectors.

Today (on June 03) the construction group reported its trading update and outlook for the FY19. In the company filing with the London Stock Exchange, the group stated that they would continue to witness volume pressure within its Utilities, Housing maintenance and Highways businesses.

Although the group is performing well with double-digit growth in its order book during FY19, their revenue growth from the Building business segment will be lower than as projected earlier.

In the trading update statement, the group stated that operating profit for FY19 would be £25mn below the previous estimate. The group is also likely to report a net debt position at the end of this financial year and would have an adverse impact on its fiscal year 2019 average month-end net debt position, in simple words, it will be bad. Net costs on account of the FRK programme for FY19 seems to be £15mn above the previously forecasted figure. 

The chief of Kier Plc, Andrew Davies, who was appointed in April this year, is due to notify the finale of a strategic review by the end of July, this year.

Shares of the Kier Group Plc plunged significantly in today’s market session and the stock was down by 41.12 per cent against the yesterday’s closing price, at the time of closing.

Daily Price Chart (as on June 03, 2019), after the market closed. (Source: Thomson Reuters)

As on June-03-19, shares of KIE closed at GBX 163.8 and plunged by 114.4 points or 41.12 per cent against the yesterday’s close price. In the past one-year, shares of KIE have touched a 52w high of GBX 1,109.47 and a 52w low of GBX 156.21 during today’s market session. On a year-to-date basis, the stock was down by approximately 31.81%.

At the current price, as quoted in the price chart, the stock has breached all the supporting levels, whether it is 30-days, 60-days and 200-days simple moving average price levels.

5-days Relative Strength Index of the stock was at 9.96 which indicates that the stock has entered massively into oversold zone.

The group has lost around 73.29% of its market capitalisation in the past one year, and at the current price, the outstanding market capitalisation of the company stood at around £265.55 mn. The company’s stock beta was 1.13, reflecting higher volatility as compared to the benchmark index.

Today’s trading volume in the stock stood at 9,359,448. However, 5-days daily average trading volume in the stock was 55.70% above the 30-days average daily volume traded at the LSE.

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