The contractor, which bought May Gurney in July, said the availability of new work continues to increase, but it warned of cost pressure at its construction business.
In a trading update ahead of its annual general meeting, Kier said its order book of secured or probable work stood at £2.2bn. This represents all of forecast revenue for the financial year and was ahead of the equivalent position last year.
Kier said: “The group’s order books in construction and services are robust and its performance is in line with the board’s expectations.
“While we are encouraged by the signs of economic growth, we are experiencing inflationary cost pressures, particularly in our construction businesses.”
Kier said it had maintained margins at around 2% and was closely managing working capital, particularly across public sector contracts and framework arrangements, where payment terms remain challenging.
Contracts haul since July
- Preferred bidder on two Priority Schools Building Programme batched schools contracts (North East: £63m and East of England: £53m)
- Contracts to design, build, finance and maintain schools for North Ayrshire council (£62m)
- Kier Living secured £42m of new work, including 165 affordable housing units for Notting Hill Housing Association
- More than £70m of construction work in relation to PFI schemes for Staffordshire Fire and London Fire Authorities
- Preferred bidder to deliver, in joint venture, the £450m Mersey Gateway bridge scheme
Following the acquisition of May Gurney, Kier has secured £300m of new work through its expanded services business, underpinning the £3.6bn order book.
Operating margins remained in line with expectations at 4.5%, reflecting a combination of Kier Services and May Gurney’s trading and the forecast £5m cost savings arising from the acquisition.
Presently the enlarged services business is bidding for £1bn of opportunities.
Last week, Kier successfully renewed its housing maintenance contract for Sheffield City Council worth £100m over 3 years, with a potential two year extension.
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