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Roads wins help Kier hit 2015 construction revenue target

Kier secured all its targeted construction revenue for 2015 before the year started, it told the City this morning.

The Bedfordshire-based firm said it had an order book of £2.6bn of contracting work as of 31 December 2014 – including all the work it required to hit forecasts this year.

Kier’s construction division posted revenue of £874M for the six months to the end of last year – a rise of 18% from the same period a year earlier.

Roads projects have played a significant role in this expansion.

The firm said in its statement to the City: “The infrastructure business continues to expand with revenue approaching £200M following strong contributions across all sectors.

“In November, Kier was awarded a place on the Highways Agency’s £1.15bn five-year collaborative delivery framework for schemes valued between £25M and £100M. 

“Building on its highways capabilities, in January the infrastructure business was awarded the £33M upgrade to the A30 to the north east of Bodmin in Cornwall.”

Kier’s group revenue – including property, residential, construction and services divisions – was £1.58bn in the six months to the end of last year. This was up 11% from the same period a year earlier.

However, group pre-tax profit dropped 2% over the same timescale to £35.9M.

Kier confirmed it was continuing talks about a possible acquisition of infrastructure consultant Mouchel, as revealed in December.

The firm also announced the arrival of Bev Dew from Balfour Beatty to become group finance director at Kier.

Chief executive Haydn Mursell said: “I am pleased to announce a good set of results, once again reflecting Kier’s ability to deliver consistently while continuing to invest for medium-term growth.

“With improving economic conditions, and, notwithstanding pressures in the supply chain, our robust execution skills and delivery, and disciplined approach to bidding and risk management, continue to deliver good results.

He added: “The order books of the construction and services divisions have increased to £6.5bn with revenue now fully secured for 2015. With an improving market, we are seeing more and higher quality opportunities filling our pipeline.

“Now that May Gurney is fully integrated, we have a broad range of services across the group and Kier is well positioned to work strategically with clients on how they can achieve their aims in light of financial challenges they face.

“Contract wins in this six-month period, such as Anglian Water and Thames Water and the provision of an integrated offering to clients such as Northamptonshire and Staffordshire County Councils, are testimony to the appeal of Kier’s integrated service, as described in Vision 2020.”

Mursell looked positively towards the future.

“Significant positions on key frameworks, a disciplined approach to new work and an improving economy position us well for the remainder of 2015 and over the medium term,” he said.

“A further increase in the interim dividend reflects our confidence in the future. We remain on course to meet the board’s expectations for the full year.”

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