Expanded Kier Group lifts revenue, underlying profit

Kier Group saw revenue and underlying profit rise sizeably in the last six months of 2015, with its interim results on Thursday showing a 32% increase in revenue to £2.1bn. Like-for-like revenue rose 9%.

The FTSE 250 firm's underlying operating profit was up 27% to £57.1m. Reported profit before tax was down to £18m from £27.8m, which the company blamed on non-underlying costs of £15.5m related to the integration of Mouchel.

Its net debt position was better than expected at £174m after £26m investment in growth, though that was up from £141m at the start of the period.

Underlying earnings per share at 37.1p were down 12%, after the issue of new shares for the acquisition of Mouchel.

"I am pleased to announce a good set of interim results which show the continued strength and breadth of the group's capabilities and our presence in growing market sectors. The group remains on course to deliver expectations for the full-year," said Kier chief executive Haydn Mursell.

Mursell said its core markets in the UK were improving and providing a platform for growth, particularly in the property, residential and regional building businesses, and over the medium term for its infrastructure businesses.

He explained that Mouchel had been substantially integrated and was performing well.

"Our presence in infrastructure services, regional building and housing aligns to growth markets with high visibility of forward pipelines and now accounts for 75% of the group's turnover."

Management was encouraged by the robust pipelines in property and residential, Mursell said, and the order books totalled £9bn in construction and services.

"We remain focused on ensuring that the group is fit for growth by continuing to focus on our operational efficiency and continuing to manage risk closely.

"This discipline, combined with the resilience and flexibility provided by the portfolio of businesses in the group, will continue to underpin our performance."

Kier Group's board increased the interim dividend by 12% to to 21.5p, from 19.2p, which it said reflected its own confidence going forward.