In a year-end trading statement this morning chief executive Andrew Davies said average month-end debt had been slashed to £115m from £234m a year ago.

Davies said progress on eradicating the contractor’s debts was ahead of expectations after a strong operational performance.

Kier also ended the financial year to June with an order book ahead by 7% at £10.8bn.

Davies said: “The group has had a strong year with volume and profit growth, increased orders and material deleveraging.

“We have enhanced our resilience and strengthened our financial position in line with the objectives set out in our medium-term value creation plan.”

He added that Kier generated substantial operating free cash flow over the 12 months and now anticipated reporting a net cash position of £165m in the year to June, more than double the £64m reported for the prior year-end.

This improved balance was partly driven by a seasonal inflow of working capital, particularly in the construction division.

Davies said “Our order book remains strong and provides us with multi-year revenue visibility.

“The group is well positioned to continue benefiting from UK Government and regulated sector infrastructure spending commitments and these strong structural drivers will allow us to further generate shareholder returns.”

Around 85% of group revenue for this new financial year is already secured.

During the year, Kier’s infrastructure business was selected to work alongside United Utilities to help deliver its proposed £3bn AMP8 programme.  This is expected to deliver around £100m per annum of design, engineering, project management and construction services for water and wastewater infrastructure

It also secured a place on Network Rail’s North West & Central Region CP7 Framework for 5 years. Works will include civil engineering and building works to existing and new stations, depots, platforms and other buildings

The construction division won the contract to build a new houseblock at HMP Channings Wood Category C prison near Denbury worth over £200m and was awarded three education projects worth a total of £110m and two healthcare projects worth £40m.