Kier Group announces ‘strong’ preliminary results
Kier Group plc, the parent company of Kier Construction in Scotland, has today announced strong full-year results for the year to 30 June 2014.
For the year ended 30 June 2014, Kier delivered revenue of £3.0 billion (2013: £2.0bn) up 51 per cent on the previous year, following nearly a full year inclusion of the May Gurney acquisition. Underlying operating profit is also up, increasing by 59 per cent to £88.0 million (2013: £47.6m).
Overall operating margins remained robust at 2.1 per cent in the Construction division (2013: 2.3 per cent) and 4.8 per cent in the Services division (2013: 4.4 per cent), in line with expectations. Underlying earnings per share are up 2 per cent to 107.7p (2013: 105.6p) and the proposed full year dividend is increased by 6 per cent to 72.0p (2013: 68.0p), reflecting the Group’s progressive dividend policy and the Board’s confidence in the Group.
The solid performance echoes Kier’s continued growth in Scotland and the north-east of England. With offices in Glasgow, Aberdeen and Newcastle, Kier Construction has expanded the breadth and depth of its core skills and has an ever-expanding client base.
Brian McQuade, managing director of the Scotland and north-east England arm of Kier’s Construction division, said: “The construction sector has shown increased buoyancy in recent months and this is reflected in our own business where we have demonstrated sustainable growth this year. We have secured significant new contracts in Scotland and have a strong order book and a healthy cash balance.”
Kier Construction is one of the five principal supply chain partners on Frameworks Scotland 2, the publicly funded procurement initiative that will deliver £600m worth of construction, renovation and maintenance projects to acute NHS facilities in Scotland over the next six years.
The company has also been appointed to the Highlands and Islands Enterprise Property Prime Contractors Framework, appointed an equity stakeholder in Hub South-West Scotland, which will deliver £400m of infrastructure investment over the next decade, and appointed to carry out £63m of schools work in north-east England by the Education Funding Agency.
Most recently, Kier Construction has just completed an £8m student accommodation project in Glasgow’s West End. Some of the projects that Kier Construction is currently working on include a £9.5m project to build a new extension at the Robert Gordon University campus at Garthdee in Aberdeen, a £45m development with British Land to build a retail store at Glasgow Fort, a £35m project to build a new education campus on behalf of East Ayrshire Council and a £40m education campus on behalf of North Ayrshire Council.
Kier highlighted a robust future pipeline of work with Kier Construction and Kier Services order books totalling £6.2bn (2013: £4.3bn) with more than 90 per cent (2013: 88 per cent1) secured and probable for 2015.
Commenting on the results, Kier Group plc chief executive, Haydn Mursell said: “I am pleased to report a good set of results showing significant progress on last year and demonstrating the robust operational performance of the business and the benefits of the May Gurney acquisition.
“Despite inflationary price and labour challenges in the market, our margins remained robust. Following the integration of May Gurney, which transformed the scale and diversity of the Group, the breadth of our capabilities has resulted in new, as well as larger contract awards. Our capabilities extend from negotiating finance and planning permissions, constructing major buildings and infrastructure as well as providing facilities management and environmental services. This spread of capabilities puts us in a unique position to pursue future growth.
“Since taking up the CEO role on 1 July 2014, the Group’s strategy has been refreshed. Vision 2020, a strategy for sustainable profitable growth, will see the Group aim to deliver double-digit compound annual profit growth for the period to 2020 and aim to be a top three player in our chosen markets.”