The improved financial position saw chief executive Andrew Davies launch a £20m share buyback programme this morning.

In an upbeat trading update for the first six month he said Kier enjoyed a strong order book at the end of December, up to 3% at £11bn on a year before giving the contractor confidence for the full year performance.

“Kier has delivered a strong first half performance, in line with our expectations, ” said Davies.

“We continue to be well positioned to benefit from UK Government and regulated industry infrastructure spending plans into areas where Kier offers market leading services, notably transport, education, healthcare, justice, defence, nuclear and water.

“Given our order book growth combined with our continued de-levering and greater confidence that we will achieve an average month-end net cash position, we have announced today a £20m share buyback, as part of our evolved capital allocation policy to maximise shareholder returns.”

He added that as a strategic supplier to key areas of the new Government’s priorities, including transport, education, healthcare, justice, defence and nuclear, Kier saw significant medium term growth opportunities, also support by substantial investment in the regulated water sector.