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Kier reports profit growth but debt up £60M

Kier

Construction and services group Kier has reported an 8% increase in underlying revenue in its half-year results up to December 2017.

Underlying revenue rose from £2bn to £2.15bn and underlying operating profit was £60M, up 5% from the £57.3M reported at the year-end in 2016. Net debt rose to £239M from £179M in the same period in 2016.

Kier chief executive Haydn Mursell said the group was on to ”deliver double-digit profit growth” in 2018.

“The group is performing well. Our £9.5bn construction and services order book, combined with our £3.5bn pipeline in the property and residential divisions, provides good visibility of work over the medium term.

“The Group’s performance reflects the strength of our business model and our financial and operational disciplines,” he said..

The acquisition of highways and utilities business McNicholas, which Kier bought in July last year, has boosted the services division revenue to £901M, up 17%. The deal was expected to cost between £15 to £20M, but the report revealed the total cost and acquired debt was £24M.

The group has taken on Carillion’s share of work on the smart motorways schemes on which it was in joint venture with the failed contractor, and all employees have transferred to Kier. 

Kier and Eiffage are now 50/50 joint venture partners on two of the HS2 civil engineering packages, lots C2 and C3, following Carillion’s collapse. It said 51 former Carillion employees have been offered the opportunity to transfer. 

The “challenging” Mersey Gateway bridge, on which Kier was in JV with FCC Construcción and C&T Corporation, opened in October last year and the company said it expects to resolve claims relating to the project and negotiate the final amount. The group also confirmed it had closed operations in the Caribbean and Hong Kong. 

 

 

 

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