Kier order book swells to £10bn but debt rises to £243m

Aaron Morby 1 year ago

A strong six months of work winning has seen Kier raise its order book by over a quarter to £10bn to create a strong platform for future growth.

Andrew Davies hopes Kier will move to net cash by year end and pay down high debt levels in 2024
Andrew Davies hopes Kier will move to net cash by year end and pay down high debt levels in 2024

Reporting results for the six months to December, Kier said the swollen order book set the firm up for profitable growth in the year ahead with 60% secured under target cost or cost-reimbursable contracts with an average order size of £14m.

Over the period, group pre-tax profit doubled to £25m from level revenue of £1.5bn. This saw adjusted operation margin rise to 3.7%, exceeding Kier’s own 3.5% medium term target.

But despite improved trading, Kier’s still battles with high average month-end net debt which has now jumped again to £243m.

Andrew Davies, chief executive, said that the 27% rise from debt of £191m previously was driven by seasonal working capital requirements and a £50m cash outflow to close its KEPS supply chain finance facility.

Kier now hopes to begin to pay down debt in 2024 as it benefits from future strong cash inflows off its large order book.

Davies said: The strong performance of the group over the last six months reflects our enhanced resilience and strengthened financial position.

“Our order book has increased significantly against the prior year, reflecting a large number of contract wins across our divisions and this provides us with good, multi-year revenue visibility. These awards reflect the bidding discipline and risk management now embedded in the business.

“Looking ahead, we expect to generate positive operating cashflow for the full year and deliver a net cash position at the year-end. Current trading remains in line with the board’s expectations despite political and economic uncertainties.

“The Group is well positioned to continue benefiting from UK Government infrastructure spending commitments and focused on the delivery of a sustainable net cash position and a sustainable dividend, in line with our medium-term value creation plan.”

Both our Infrastructure Services and Construction divisions performed well, more than offsetting Property which experienced a fall in transactions.

Construction drove profit growth at the group doubling operating profit to £26m off revenue up 4% to £709m. This represented an adjusted operating margin of 4.6%.

Revenue at Infrastructure edged up 5% to £818m although operating profit was level at £22m, representing a margin of 3%.

Latest news

Wates wins former Daily Mail printworks transformation

British Land advances major cultural venue at London’s Canada Water
15 hours ago

Mace poaches Ramboll chief to be Head of Engineering

Martin Feakes will develop civil and structural engineering offer at Mace
14 hours ago

Subcontractors form alliance for major civils jobs

Trio of specialists join forces to collaborate and offer Tier 1 contractors a turnkey solution
18 hours ago

Fear of supply chain failures boosting collaboration

Procurement survey also reveals project bank account use is rising
18 hours ago

Wates sets up business to target 160,000 mouldy social homes

Healthy Homes service will be offered to social landlords across England
19 hours ago

Higgins wins £75m Peabody Passive House job

Latest phase of Deptford Landings to start construction
18 hours ago

Contractors and unions agree Sizewell C working deal

New deal offers improved sick pay and parental leave over Hinkley Point deal
1 day ago

Competition chiefs win legal fight for more construction raids

High Court rules CMA officials can raid a domestic property as part of investigation
2 days ago

More Osborne companies file administration notices

Three more divisions lodge notices with court
2 days ago

McLaren wins multi-storey urban logistics contract

South London win with British Land is pioneering urban logistics hub
2 days ago

Big social housing schemes at risk over funding uncertainty

Housing associations warn uncertainty over public funding beyond 2026 is curbing new schemes
2 days ago

Kier wins Worcestershire town centre renewal

Firm secures Bromsgrove commercial and cultural hub project
2 days ago

BAM signs Kent school contract at £42m

Sevenoaks school rebuild signed off at £8m more than first estimates
2 days ago

RG Group signs £121m Newcastle rental homes job

Developer Olympian Homes advances 519 flats plan at Pottery Lane site
5 days ago

Geoffrey Osborne files administration notice

Contractor in talks to save parts of the business
5 days ago

Winners named for £260m Manchester Uni framework

B&K, Henry Bros, Graham, Robertson and Vinci among new line-up
5 days ago

Shed specialist Benniman rides out market lull

Worcestershire warehouse builder says industrial and logistics work is picking up again
5 days ago

Another contractor cleared after high profile immigration raid

Adana Construction employees were working legally on site swooped on by Home Office
5 days ago

McAleer & Rushe wants to meet new London suppliers

Contractor holding Meet the Buyer event in London: Register now
5 days ago

McAlpine signs £500m Broadgate dual towers deal

Work to start on iconic 36-storey and 21-storey towers
6 days ago

Worker rescued from collapsed four metre deep trench

Fire crews take six hours to save trapped builder near Blackwall Tunnel
6 days ago

Gove puts another major building scheme on hold

Secretary of State starts another planning fight after M&S defeat
7 days ago

Greenwich University tenders £300m framework

Up to five firms will carry out upgrade and newbuild work at three campuses
6 days ago

Work starts on Manchester 26-storey Obsidian tower

Contractor Domis starts Salboy's 10th Manchester scheme in seven years
6 days ago

Race for £1.3bn West Midlands social homes framework

The Community Housing Group reboots tender race for new build housing
6 days ago

Delancey submits £400m King’s Cross lab plans

200,000 sq ft lab/office project will be built above railway and tube tunnels just 4.5m below
6 days ago

Winners revealed for £150m fire safety framework

New deal will help organisations comply with the Building Safety Act
6 days ago

Sellar plans £500m City tower next to Walkie-Talkie

Consultation starts on London 60 Gracechurch Street tower
7 days ago

Severfield ends year on high with record order book

Orders top £500m with strong future pipeline of opportunities ahead
7 days ago

Second senior director exits National Highways

Commercial director Malcolm Dare set to move on to new role
7 days ago

Contractor services