July 10, 2018 / 7:12 AM / in 4 months

UPDATE 1-UK's Kier Group to sell non-core assets

(Adds details, background)

July 10 (Reuters) - British construction and support services company Kier Group Plc said on Tuesday it was on course to meet forecasts for underlying profit and earnings while launching a cost-savings plan that will include the sale of non-core assets.

Kier said the programme, which it began to implement last month, would improve productivity, operating margins and cash generation.

It gave no details on what assets it expected to sell but said it expected to realise the benefits from the plan beginning in 2020 and thereafter.

In the trading update following the end of its financial year in June, the company also said it was on course to meet forecasts which had called for double-digit profit growth in the current year, helped by a higher construction and services order book of over 10 billion pounds ($13.25 billion).

Big government contractors like Kier are facing deeper scrutiny from investors as Britain looks to toughen contract terms for outsourcing companies following the collapse of outsourcing group Carillion earlier this year.

Kier has also warned that uncertainties around the UK’s departure from the European Union were delaying major UK projects from the construction of new tower blocks and power stations to roads and rail lines.

The company has lost roughly one-fifth in value since the Brexit referendum. ($1 = 0.7550 pounds) (Reporting by Muvija M in Bengaluru; Editing by Gopakumar Warrier)

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