Kier profits up despite public sector workload fall

Construction, development and services group Kier has seen its pre-tax profit rise 24% to £69m in the year to June 30.

Preliminary results issued today also record a 4% rise in revenue from £2,099 million to £2,179m.

Kier’s public sector workload is around half of its construction activity, down from around three-quarters over the course of the year.

However, its construction margins improved from 2.6% to 2.7%, despite the difficult economic conditions.

Order books for construction and services increased from £4.2bn to £4.3bn, with Kier claiming it has “a strong pipeline” of further opportunities.

Chief executive Paul Sheffield said: “Kier has had another successful year in a tough economic environment; underlying revenue and profit before tax are well ahead of last year and cash generation has been very strong, with average month-end cash balances at a high level.

“Our diverse skills and integrated business model have provided greater resilience during these challenging economic conditions. We are encouraged by the prospects we see in markets such as power and waste, in mixed-use regeneration and in the growth we see in public sector outsourcing.

“Today we have announced a full year dividend of 64 pence per share, a 10% increase on last year. This demonstrates the strength of our financial position and the confidence we have in our business going forward.

Although we expect the next 12 months to be challenging, we remain confident that our positioning across a wide spectrum of service areas, coupled with our committed and professional staff, will enable us to deliver a good performance in the new financial year.”