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Kier building for the long term

SHARE TIP: Kier (KIE)
April 14, 2011

BULL POINTS:

â–  Reliable revenues

â–  Strong cash position

â–  Plans to raise funds from land sales

â–  Attractive dividend yield

BEAR POINTS:

â–  Squeeze from spending cuts

â–  Subdued housing division

IC TIP: Buy at 1346p

Let's be clear about one thing - government spending on the UK's infrastructure will slow down this year, but it won't stop. And, while big operators in the construction industry won't be immune to spending cuts, smaller outfits will feel most of the pinch. Happily, Kier is one of the bigger ones, and has managed to secure a further £95m-worth of new work since February. In fact, all of 2011's budgeted construction revenue is secured, as is 65 per cent of 2012's budget.

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