Kier reveals rise in profits as it details plans to cut £375m debt

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© Andrew Smith

Kier Group’s end of financial year report reveals that revenues have climbed to £4.5bn, with record order books of £10.2bn, as the construction giant details its plan to cut its £375m debt

Kier’s turnover climbed by 5% in the year to 30 June 2018. Pre-tax profit also increased to £106.2m, 12 months after Kier incurred a pre-tax loss of £14.2m.

Kier has also detailed how it expects to raise up to £50m from non-core business disposals as part of a plan to cut its debt of £375m.

Alongside £20m annual savings from its Future Proofing Kier streamlining programme, the group aims to reduce debt to £250m and be in a net cash position by 2021.

Haydn Mursell, chief executive, said:  “I am pleased to report a good set of results with all divisions performing well.

“We have launched the Future Proofing Kier programme which will streamline the business thereby enabling us to deliver a more efficient service to clients, respond to changes in our markets and capitalise on growth opportunities, while, importantly, also accelerating the reduction of the group’s net debt position.

“Our strong market-leading positions, our record £10.2bn construction and services order books, and our £3.5bn property development and residential pipelines, will see the group deliver on its Vision 2020 targets.

“In addition, the Future Proofing Kier programme positions the group well for an improvement in operating margins and higher cash generation, culminating in a net cash position for FY21.”

He said that Kier would stabilise its investment in its property and residential divisions to help deliver targets.

Across the divisions, construction revenue remained stable at £2bn with an underlying operating profit increase of 5% to £42m.

Construction experienced strong revenue growth during the fourth quarter following a decline earlier in the year as a result of slower site starts and adverse weather.

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