Shares in construction and services company Kier are up a hefty 10.3% this morning, retracing much of it’s recent Carillion-collapse-inspired decline and flirt with UK referendum lows. Investors can thank a timely half-year trading update which is in-line with expectations (business steady, margins maintained) and allows management to reiterate both FY guidance (revenues secured, double-digit profit growth) and 2020 strategic targets.

Phew! After being tarred with the same brush as fellow government outsourcers and project managers lately, sentiment may be on the turn. The likes of more disciplined Kier are seen benefiting in the long run as new opportunities result from its peer’s demise (taking the reins on JVs like HS2, but on new terms) and tendering becomes more prudent on both sides, allowing the sector to bid on both quality and sustainability rather than just to price for project wins.

An order book of £9.5bn suggests work remains in plentiful supply and management is confident in extension of current highways contracts. Net debt may well have risen, but this is explained by property & residential division investment following the McNicholas acquisition last year, and expected to reverse over two years.

Best of all, however, is the shares not appearing on the FCA’s list of most shorted UK stocks (unlike CLLN, IRV, MTE, BAB, CPI, SRP). This implies today’s up-move is the real thing in terms of revived bullishness and not just another short squeeze. Shares still pushing highs of the day.

Mike van Dulken, Head of Research, 25 Jan 2018