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Kier wins place on some UK construction contracts post Brexit

Published 23/08/2016, 09:24
Updated 23/08/2016, 09:24
© Reuters. Offices are seen at dusk as St. Paul's cathedral and construction cranes are seen on the skyline in the City of London

(Reuters) - Kier Group Plc (L:KIE) said the company along with others had won three UK contracts worth over 5 billion pounds to carry out construction, easing fears that work had stalled across the sector after Britain's vote to leave the European Union.

The company, whose activities range from building power stations to outsourcing work for local councils, said it had been selected by the British health department as one of six partners on a four-year framework worth 4 billion pounds.

Share in Kier were up 2.3 percent at 1215 pence at 0721 GMT. As of Monday's close, the stock has lost 5 percent since Brexit on concerns that Brexit would hurt building activity.

The latest PMI data shows sentiment in the construction industry at a seven-year low, while some infrastructure projects have been held up on increased uncertainty. Despite this, some firms, including building materials group Kingspan (I:KSP), have seen a rise in the UK business since the vote.

UK infrastructure funds have gained in recent weeks on hopes of increased government-backed spending, with new Prime Minister Theresa May open to the idea of using infrastructure to stimulate a flagging economy.

Kier said on Tuesday that it had also been selected to provide some services for the University of Cambridge and Gatwick Airport.

The company did not give any details on its portion from the frameworks, but said that the contracts were won after July 4, when it first said that Brexit had not impacted its business.

At that time, the company's construction order book covered more than 85 percent of its targeted revenue for financial year ending 2017.

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