Kier £175m record cash pot stokes bid rumours

Aaron Morby 14 years ago
Share

Kier has built up record cash reserves over the year, stoking speculating that it is on the look out for an acquisition.

The integrated construction group today reported strong annual results with underlying pre-tax profits up 11% to £58m from turnover down 5% at £2bn.

The strong performance saw it lift its dividend payment to shareholders by 5%.

During the year the construction business generated £111m cash from operating activities taking net funds to a record £175.2m.

A city analysis told the Enquirer: “There are certainly a lot of things that Kier could spend it cash on. There is scope to build up partnership homes, or invest in the growing number of local authority development partnerships.

“Each of these options would make good sense, but there is also a feeling that Kier is eyeing opportunities to extend its capabilities in contracting.”

Kier expects the nuclear building programme will deliver significant amounts of civils work for the construction arm. Over the next decade the civils work for energy investment projects will reach £6bn.

The civil engineering arm built up a strong track record delivering gas-fired power station work packages, which would be a spring board into the nuclear power station civils programme.

This week, Kier secured its first contract worth £4.5m with Bam Nuttall for enabling works at Hinckley C. It is presently also bidding for the £1bn civils package at the site.

    Kier performance by division

  • Construction Profit £36.2m (39.1m); turnover £1.42bn (£1.49bn); margin 2.6%
  • Support services Profit £21.4m (£17.9m); turnover £470m (£438m); margin 4.5%
  • Partnership Homes Profit £9.9 (£1.1m); turnover £158m (£151m); margin 6.3%
  • Development Profit £0.3m (loss £1.9); turnover £53m (£65m)

Construction sales fell 5% to £1.42bn, with marginal growth in UK turnover offset by a decline in revenue from overseas operations, particularly those in Dubai and Romania.

In support services annual revenues are expected to exceed £500m by 2012.

Paul Sheffield, chief executive, said Kier was busy talking to local authorities about bundling up  services to drive greater efficiency.

He said: “Our bidding teams are busier then ever helping our local authority partners to address the budgetary pressures which they are facing by providing innovative funding and development solutions and assisting them in their desire to bundle several services into one contract.”

At North Tyneside Council Kier is in discussions to broaden our range of activities to include both development and waste management opportunities.

For Sheffield City Council it existing contract teams are working together to provide property management, funding, development, construction, housing maintenance, street cleansing and recycling.

Kier also said that it hope to benefit from the new era of house building, which would see firms benefit from public and private building capability.

Sheffield said: “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.

“We are also encouraged by the prospects we see in markets such as power, utilities, waste and mixed-use regeneration schemes and overseas, ” he added.

Over the year Kier managed to hold its performance in a deteriorating and competitive market.

Operating margins remained strong in construction division at 2.6% and grew to 4.5% from 4.1% at the support services business.

The Partnership Homes division turned round with operating margins up from 0.7 last year to 6.3%, benefiting from land disposals and transfers.

Kier completed 1,060 units (2009: 1,141), with a slight shift mix towards private development homes – 499 came from private development sales and 561 through affordable housing.

These unit sales, together with land sales boosted profits to nearly £10m.

Latest news

26 face fight to renew spots on £1bn NEPO civils deal

Next generation framework to start in March 2025
10 hours ago

Go-ahead for £170m King’s Cross life sciences office project

Innovative arched design to carry landmark building over railway tunnels
10 hours ago

Mitie buys power contractor ESM for £8.5m

Building FM firm strengthens high voltage contracting offer
9 hours ago

New vision unveiled for £5bn Liverpool Waters

More housing included in central docks area after Labour £55m funding boost
18 hours ago

String of contract wins sees turnover surge 25% at Mace

Construction division sees revenue leap to £1.73bn
10 hours ago

Morgan Sindall wins £32m Walsall waste centre

Contract will transform former metal factory site
10 hours ago

Kier wins £30m Greenwich teaching block

London South East Colleges plans to spend £47m on Greenwich Campus redevelopment
21 hours ago

Blenheim House Construction applies for administration

Surrey contractor employs around 80 staff generating £87m turnover
1 day ago

GMI chief jumps to Henry Boot Construction

Lee Powell will replace Tony Shaw as MD when he leaves at the end of 2024
1 day ago

Avant Homes makes £109m loss

House builder reveals huge loss just days after entering Crest Nicholson bid race
2 days ago

Greggs unveils plans for giant distribution centre

Bakery giant to build 311,551 sq ft logistics centre in Kettering
1 day ago

£330m south east London 1,250 homes scheme approved

Outline planning for New Belvedere development near the Thames
1 day ago

Green light for Birmingham 1,200-bed student scheme

Cambrian Wharf project will rise to 14 and 35 storeys
1 day ago

Welsh fit-out specialist files administration notice

£30m turnover employee-owned Paramount D&B lodges court notice
2 days ago

Skanska signs £105m London Millbank office rebuild

Original 1915 building facade will be dismantled and rebuilt
2 days ago

Historic facade contractor goes into administration

Administrator seeking buyer for Charles Henshaw & Sons
5 days ago

Three-year HS2 station box excavation completed

Enough clay to fill 300 Olympic sized swimming pools removed from Old Oak Common site
2 days ago

BAM starts £88m Fife passivhaus school job

1,800-pupil school will be built near Rosyth Docks
2 days ago

Torsion appoints new Chief Operating Officer

David Worsley promoted as leadership team shuffled at Leeds based firm
2 days ago

Tilbury Douglas site manager saves schoolboy’s life

Site manager carries collapsed schoolboy to resuscitation unit he helped build
5 days ago

Extra HS2 payment sees SCS contract jump to £4.24bn

Skanska Costain Strabag JV additional payments rise to £650m after third handout
2 days ago

Plans lodged for 3,300-home Salford tower cluster

£1bn Regent Park scheme includes UK's third tallest building at 70 storeys
6 days ago

Domis founder Lee McCarren steps down

Fellow director Kingsley Thornton takes helm as co-founder retires
6 days ago

Spencer lands civils package on £300m energy plant

Subcontract worth £23m on pioneering Manchester green energy storage scheme
5 days ago

Van Elle and M&J Evans team-up for housing works

Piling and groundworks specialist start new collaboration deal
5 days ago

Muse JV closes Wolverhampton City Centre West quarter deal

English Cities Fund completes council partner deal for 1,000-home plan
5 days ago

Ofwat approves £88bn AMP8 water spending spree

Spending on infrastructure ringfenced, unspent funds returned to customers
6 days ago

‘Bellingham Bridge’ takes shape on HS2 in Birmingham

Watch work on four huge piers for bridge named after England superstar
6 days ago

Construction swings from weakest to strongest sector

Construction output rebounds by 1.9% in May after three months of decline
6 days ago

Costain appoints new commercial director

Paul Morris takes over from David Taylor
6 days ago

Contractor services