Kier Group meets full-year expectations

Property, residential, construction and services company Kier Group posted its preliminary results for the year to 30 June on Thursday, falling in line with expectations as revenue grew 26% to £4.2bn, or 8% on a like-for-like basis.

The FTSE 250 firm’s underlying profit from operations was £150m - up 44% - which included a full-year contribution from Mouchel, an increased share of property joint venture results, and margin recovery supported by cost efficiencies.

Underlying earnings per share were up 11% at 106.7p, with the board proposing a 17% increase in the full-year dividend to 64.5p.

At year-end Kier had net debt of £99m, narrowing from £141m a year earlier, after its £31m investment in the property and residential divisions, and its IT systems.

Its operating cash conversion was strong at 121%, with a net debt to EBITDA ratio of less than one, a year ahead of the board’s ‘Vision 2020’ target.

“I am pleased to report a good set of results reflecting the evolution of the Group during the year following the completion of the integration of Mouchel,” said Kier Group chief executive Haydn Mursell.

“This year, we have successfully focused on our commercial and capital disciplines and are pleased to report a significant improvement in our net debt, further strengthening our balance sheet and the delivery of a key Vision 2020 target: net debt: EBITDA of less than 1x, a year ahead of our expectations.”

Mursell said the group was continuing to perform well in growing market sectors including infrastructure, housing and regional building, providing a breadth of capabilities to our clients.

“For the first time, 50% of group profit now comes from our services division where essential day-to-day services are provided to clients and we have long-term visibility of our future pipeline of work.

“We remain focused on growing the business through improving operational efficiencies and investing in new technology to support our operations.”

The board believes that its range of complementary businesses underpins the resilience of its operating model and the strength of its order book, Murcell explained.

“Having completed the integration of Mouchel, we are well progressed with the simplification of our portfolio of businesses and are focused on capitalising on the growth opportunities available to the group.

“We remain confident of achieving our goal of double-digit profit growth on average each year to 2020.”