The contractor said it now had more than 60 framework agreements, which along with negotiated work, accounted for 80% of contract awards.
The shift to this work helped to deliver a 26% uplift in underlying group profits to £31.3m in the first six months of the year on turnover also up 9% at £1.1bn.
Paul Sheffield, Chief Executive said: “Despite the current challenging economic environment, the group has delivered good underlying profits and cash generation.”
The firm has also retained good order books for both construction and support services at more than £4bn.
“Our success is underpinned by our strong track record, geographic coverage, deep‑rooted customer relationships and an increasing number of framework agreements and collaborative partnerships.
“We continue to attract a wide variety of opportunities in our divisions and are encouraged by the prospects we see in markets such as power, infrastructure, commercial, mixed‑use regeneration and overseas.”
Group breakdown
Construction: Profit: £19.8m, up 17%; turnover £728m, up 7%; margin 2.7%
Support Services: Profit: £10.9, 8% up; turnover £243, 6% up; margin 4.5%
Partnership Homes: Profit £1.7m (£0.3m loss); turnover £60m, 20% down
A strong performance by the construction business built net cast reserves to £144m. The growth in frameworks and negotiated work leaves Kier with all targeted revenue for the rest of the year in place and 65% of next year’s workload secured.
Despite fiercely competitive markets, construction operating profits surged ahead 17% to nearly £20m on turnover up 7% at £728m. This saw margins lift from 2.5% to 2.7%.
Sheffield said education still accounted for about a third of work secured. The firm has recently bagged £100m worth of office work as commercial projects staged a recovery in London and the south east.
Cash levels, one of the key measures in this division, continued to be strong with cash balances of £434m.
On the support services side of the business Kier Building Maintenance saw revenue levels ahead of last year at £179m (2009: £167m). Facilities management continued its geographic growth but revenues remained flat at £60m.
Sheffield warned that the affordable housing sector faced some uncertainty over the next 12 months due to changes in the funding model.
Private housing completions were broadly in line with expectations while affordable housing output was slightly behind taking total completions to 464 compared with 488 last time.
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