Can Kier Group (LON:KIE) start to reconstruct its stock price with next Thursday’s full year report?
2017 hasn’t been kind to Kier. The first few months of the year were OK, the stock climbing to an 18-month peak of £15.05 in March. Since then, however, it has crumbled, investors removing brick upon brick of value until it hit a 13-month nadir of £11.30 just last week. Kier Group PLC now sits at a current trading price of £11.48.
So what’s gone wrong? Well, it seems that wider sector concerns – in part stoked by the Carillion (LON:CLLN) collapse – have outweighed the company’s specifics. Even a string of ‘Buy’ ratings from the likes of Peel Hunt, Numis Securities and Liberum Capital have done little to rejuvenate its market performance.
For example, while its interim results near the end of March sent the stock to that aforementioned 18 month high following a 4% rise in pre-tax profit to £56.5 million and a 5% hike to its dividend, those gains didn’t last long at all. The day after the update the stock began to fall, dropping all the way below £12 in the 2 and bit months following the interim report.
At the end of June, it then revealed it was taking a £73 million full-year hit after deciding to close its Hong Kong and Caribbean businesses as part of its ongoing ‘portfolio simplification’. It did go on to say that its annual underlying profit was on track to meet expectations, with continued improvements in its property and residential divisions, only to be met with a shrug by investors.
In terms of next week’s full year figures, analysts are forecasting Kier Group will post a 3.9% increase in revenue to £4.27 billion alongside effectively unchanged earnings of 1.06p per share. The big question is whether this will get so far unconvinced investors back on board.
Kier Group PLC has a consensus rating of ‘Buy’ with an average target price of £15.48.
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