Scottish operations help Kier remain on track

Brian McQuade
Brian McQuade

The substantial integration of Mouchel and the growth of its Scottish operations have helped Kier to remain on course to deliver full-year expectations, the Group said today.

Results for the six-month period to 31 December 2015 saw Kier report a 19 per cent increase in pre-tax profits to £44.2 million as revenue increased 32 per cent to £2.1 billion. Underlying operating profit rose 27 per cent to £57.1m.

The acquisition of Mouchel saw revenues at Kier’s services division jump 48 per cent to £842m, with operating profit also rising strongly from £23m to £40m.

Brian McQuade, managing director of the Scotland and north-east England arm of Kier’s Construction division, said the growth and ongoing successful framework model for the arm have supported the positive results.

With offices in Glasgow, Aberdeen and Inverness which employs around 200 people, the Scottish outfit has continued to grow its business operations, expand its order book, increase contract wins and maintain and facilitate local employment and training opportunities throughout the country.

McQuade said: “I’m pleased to announce a good set of financial results today, which our Scottish and north-east England construction business has made a strong contribution to. We’ve performed well this year, increasing both our headcount and framework and tender wins and taking a proactive yet disciplined approach to growth, which has strengthened our market position and provided a strong pipeline of work.

“In the past 12 months we have cemented our position as a healthcare construction leader, particularly with the recent announcement of our £17m contract with NHS Grampian on a backlog maintenance project for Aberdeen Royal Infirmary. Our ongoing success as part of the £1.5bn Scape National Minor Works Framework will see us work with NHS Greater Glasgow & Clyde on a number of projects during 2016.

“We have also increased our activity in the education sector over the past year. We are currently on site delivering several education projects across Scotland, including the £43m William McIlvanney Campus at Kilmarnock on behalf of East Ayrshire Council, the £25m Ayr Academy and the £35m redevelopment of Marr College for South Ayrshire Council, the £36m Garnock Campus for North Ayrshire Council and the £13m Caol Campus for The Highland Council.

“Our commitment to the Scottish construction sector also goes beyond our business operations. We continue to provide local jobs to people within 20 to 40 miles of the contract postcode, supporting local supply chains, contractors and SMEs and offering training opportunities for the wider community.”

Haydn Mursell, chief executive, said the interim results show the “continued strength and breadth of the Group’s capabilities and our presence in growing market sectors”.

He added: “In the UK, our core markets are improving which provides a platform for growth, particularly for our property, residential and regional building businesses, and over the medium-term for our infrastructure businesses. Mouchel has been substantially integrated and is performing well. Our presence in infrastructure services, regional building and housing aligns to growth markets with high visibility of forward pipelines and now accounts for 75 per cent of the Group’s turnover.

“We are encouraged by the robust pipelines in Property and Residential and the order books totalling £9bn in Construction and Services. We remain focused on ensuring that the Group is fit for growth by continuing to focus on our operational efficiency and continuing to manage risk closely. This discipline, combined with the resilience and flexibility provided by the portfolio of businesses in the Group, will continue to underpin our performance. We look forward to the future with confidence.”

Meanwhile Kier has announced the appointment of Justin Atkinson as its senior independent director with immediate effect.

Justin was appointed to the board of directors of Kier in October 2015, having previously been chief executive of Keller Group.

Phil White, Kier’s chairman, said: “On behalf of the board, I would like to congratulate Justin on his appointment. Justin’s skills and experience have enabled him to make a positive contribution to the board since joining Kier and I very much look forward to working with him in his new role.”

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