Shares jumped with news it has taken on Carillion contracts as well as winning £300m in other contracts.
Companies: Carillion, Kier Group
Some welcome good news for Kier Group (LON: KIE) shareholders today after it announced £300m in contract awards as well as confirming it has taken on two Carillion contracts.
After Carillion's infamous downfall less than a fortnight ago, going into liquidation after its £1.5bn debt pile proved too large, many of Carillion's 20,000 UK employees were left unsure about their futures.
Management of Kier today confirmed it has picked up Carillion's joint venture contracts for HS2 and on Highways England employing a combined 200 Carillion employees.
On HS2, Kier is now a 50/50 joint venture partner with Eiffage for two Engineering contracts employing 51 Carillion employees.
On Highways England smart motorways scheme, Kier has now assumed full responsibility for the project after previously working on the joint venture with Carillion:
"All employees currently working on the schemes have been offered the opportunity to join Kier. In total c.150 employees will be making the transition to Kier in the next week."
Today's update also announced a combined total of £300m in new contracts and contract extensions for both Kier and McNicholas, which the Group acquired in July 2017.
McNicholas has been awarded contract extensions totalling £140m over the next five years., including two gas contracts in Northern Ireland plus an electrical contract with Network Rail.
Kier's Regional Building division has also been awarded a £160m Public Health England contract for the construction of a new bioscience facility in Essex. Work is scheduled to commence next month.
Shares in the Group were up over 13% to 182p on Thursday morning off the back of the announcements.
Currently, KIE has a Market Cap of c. £1 bn and trades on a price multiple half that of the industry median of 14x.
In FY17 it reported a wafer-thin Net Profit of £10m from Revenues of £4.1 bn. This margin is forecast to grow substantially in FY18, with consensus forecasting Net Profits of £115 from Revenues of £4.4bn, bolstered by today's announcements. It also has a forecast dividend yield of 8%.