Kier's profit jumps 10%

Pre-tax profit is up by 10% at Kier as it takes advantage of its local network and presence on frameworks.

The firm recorded a pre-tax profit of £55.5m for the year up to 30 June 2010, compared with £50.6m in 2009. Revenue was down however, from £2.14bn to £2.09bn.

Cash stood at £175m, compared with £93m at the same point in 2009 - £111m was generated from operating activities in the construction division.

Paul Sheffield, who took over as chief executive earlier this year, said: “Kier continues to benefit from its established client relationships and financial strength and is well placed to attract work through its wide network of local offices and the numerous frameworks in which it is involved.

“Our construction order books of secure and probable contracts remain robust, much of it won through framework agreements, providing confidence that we can sustain healthy operating margins and strong cash flows. Our integrated business model provides us with unique opportunities drawing on the strength of our relationships with public and private sector clients and this has proved to be very resilient during the global economic slowdown.”

Margins in the construction business stayed at 2.6%, while they rose slightly to 4.5% from 4.1% in the support services division.

Predicting the next 12 months, chairman Phil White said: “Market conditions in 2011 will remain challenging for all our businesses. However, with our strong track record of delivery and our innovative financing and planning skills, we expect to continue to grow our UK market share, particularly in Construction and Support Services.”

The firm is still in the process of appealing against the size of its £18m fine, imposed by the Office of Fair Trading for cover-pricing activities, though the amount is still provided for in the accounts.