UPDATE 1-Kier confident on recovery in British construction market

Thu May 15, 2014 5:17am EDT

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By Li-mei Hoang

LONDON, May 15 (Reuters) - Construction company Kier Group said it was optimistic the British economy was recovering after it saw growth across all of its businesses and secured more than 630 million pounds ($1.06 billion) of new contracts in its third quarter.

Kier said on Thursday it had seen an increase in the level of opportunities across its public and private sector work especially in Britain over the last three months, where the recovery in the construction market is taking off.

Data this month showed Britain's construction sector, which accounts for just over 6 percent of the economy, grew for the 12th straight month in April albeit at the slowest rate in six months according to Markit purchasers manager index.

The FTSE 250 company, whose activities range from building power stations to providing outsourcing for local councils, said it had won more than 500 million of new contracts in its construction division for the year to date.

It was also named the preferred bidder for two contracts, worth 130 million pounds over 15 years for Anglian Water to manage its utilities business, which will commence in July 2015.

"It is a consequence of better economic conditions, it just breeds confidence," Chief Financial Officer Haydn Mursell told Reuters.

"Pretty much all corporates are starting to deliver, generally, better results or certainly foresee better results and they are investing ahead of that," he added.

Mursell, who joined the business four years ago from infrastructure group Balfour Beatty, will take over CEO Paul Sheffield's role on June 30.

Kier said that the bulk of its targeted revenue for 2015 was secure, with order books maintained at around 7.5 billion pounds.

Shares in Kier were up 4.7 percent at 1724 pence by 0834 GMT, making it the top riser on the FTSE 250 index.

"Very strong construction growth is the key highlight. Kier is well run, offers hidden value in property and strong growth driven by rapidly recovering construction and (the acquisition of) May Gurney," said Liberum analysts in a note. ($1 = 0.5960 British Pounds) (Reporting by Li-mei Hoang; Editing by David Goodman and Sophie Walker)

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