2 July 2015
KIER GROUP PLC
Disposal of fleet and passenger services business
Kier Group plc ("Kier"), a leading property, residential, construction and services group, announces that it has completed the disposal of its fleet and passenger services business, Kier FPS Limited ("FPS"), to Alpha Holdco 1 Limited, an entity managed by Endless LLP, for a total cash consideration of £17.9m paid in full on completion. The disposal includes the transfer of FPS' finance lease debt of approximately £32m (as at 30 June 2015).
FPS is a provider of specialist vehicle contract leasing and fleet management services to public sector clients and Kier's local authority highways and utilities businesses. FPS became part of Kier as a result of the May Gurney acquisition in 2013 and, since that time, has been under review in light of Kier's disciplined approach to capital allocation and its strict return on capital criteria.
In the year ended 30 June 2014, FPS reported third party revenues of £36m, a profit before interest and tax of £4m and had gross assets of £55m. In the year ended 30 June 2015, FPS' estimated third party revenues and profit before interest and tax are £34m and £5.6m, respectively.
Kier and FPS have entered into a five-year agreement under which FPS will continue to supply Kier with fleet services to its local authority highways and utilities businesses.
Proceeds from the sale will be used to reduce Kier's debt and finance leases and to fund growth opportunities in line with Kier's strategy.
Commenting on the sale, Haydn Mursell, Kier's Chief Executive, said: "FPS was acquired as part of the May Gurney transaction. However, in light of our strict return on capital requirements, we concluded that it would be appropriate to dispose of FPS to a specialist operator which will be managed by the existing management team."
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Contacts:
Faeth Birch/Daniela Fleischmann (Finsbury): +44 (0) 20 7251 3801
Kier press office: +44 (0) 1767 355 903 / +44 (0) 7791 719452
