UPDATE 1-UK's Kier sees year in line on public sector wins

* Says secured high level of public sector work

* To restart contruction on some housing developments

(Adds detail, background)

LONDON, July 13 (Reuters) - British construction company Kier Group Plc (KIE.L) said on Monday full-year underlying profit will meet current market expectations thanks to a high level of public sector work.

"We have continued to secure a high level of public sector work largely in the education and health sectors and in the regulated sector work continues to flow," the company said in a trading update.

Kier also echoed comments from housebuilders such as Barratt Developments (BDEV.L), Persimmon (PSN.L) and Taylor Wimpey (TW.L) that house prices have stabilised in some locations. [ID:nL8683793]

It was therefore restarting construction on a number of housing developments although added it remained cautious on the outlook for the division for 2010.

Analysts currently expect the company to report adjusted pretax profit of 50 million pounds ($80.5 million) for the year to June 30 2009, down from 89.2 million in the previous year. Shares in Kier, which have slightly underperformed other construction and materials companies in 2009 .FTASX2350 after a strong performance last year, closed on Friday at 846.5 pence. (Reporting by Victoria Bryan; Editing by Lorraine Turner) ($1=.6211 Pound)