Kier says home reservations down 35 pct

LONDON (Reuters) - Construction, housebuilding and maintenance firm Kier said on Friday home reservation levels were currently down 35 percent year-on-year, as market conditions have deteriorated further in the last two months.

The company said it expects reduced home sales for its full year to June 30, but overall pre-tax profits in line with expectations. Home reservations are sales that have yet to progress to the contract stage.

A poll of eight analysts by Reuters Estimates forecast median pre-tax profit of 88.52 million pounds, compared to 79.6 million last year.

"Barring any further significant market setbacks for our residential business overall profit before tax for this year is anticipated to be in line with expectations, our balance sheet is strong and our cash balances remain high," Kier said in a statement.

The firm joins a chorus of builders, including Persimmon, Redrow and Barratt, which have warned that the housing market is slowing sharply as mortgage costs rise due to the global credit crunch.

Merrill Lynch analyst Mark Hake said there was still the chance of a setback for Kier.

"Remember that they still have about 16 percent of planned units to sell by the end of June," he said.

"Not a cheap stock to our mind, but insulated to a degree from the worst problems of the housing market in having substantial non-housing operations," he added.

Shares in the company were up 1.62 percent at 1,187 pence by 10:12 a.m., valuing the company at 441.5 million pounds.