Kier Group plc today (17 March) announces a good set of financial results which are supported by the growth and ongoing successful framework model for Kier Construction in Scotland and the north-east of England.
With offices in Glasgow, Aberdeen and Inverness which employs around 200 people, the Scottish construction leader 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.
Brian McQuade, managing director of the Scotland and north-east England arm of Kier’s Construction division, 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 £1.5 bn 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.”
Commenting on the results, Haydn Mursell, chief executive, said:
“I am pleased to announce a good set of interim results which show the continued strength and breadth of the Group’s capabilities and our presence in growing market sectors. The Group remains on course to deliver expectations for the full-year.
“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% 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.”
Kier Group plc, a leading property, residential, construction and services group, announces its results for the six-month period ended 31 December 2015
Good interim results reflecting continued progress in delivery of Kier’s five-year strategy
| ||Six months ended 31 December 2015||Six months ended 31 December 20143||Change|
|Operating profit Underlying2||£57.1m||£44.8m||+27|
|Profit before tax Underlying2||£44.2m||£37.0m||+19|
|Basic earnings per share|
|Interim dividend per share||21.5p||19.2p4||+12|
Financial information in this table relates to continuing operations.
1Group and share of joint ventures.
2Stated before non-underlying items.
3Comparatives restated to reflect the reclassification of the UK mining activities to discontinued operations.
4Restated for the bonus element of the rights issue associated with the Mouchel acquisition.
Highlights – good results in line with expectations, on course for full-year with second-half weighting
- Revenue1 of £2.1bn up 32%; like-for-like revenue up 9%;
- Underlying operating profit of £57.1m, up 27%;
- Reported profit before tax of £18.0m (December 2014: £27.8m), which includes non-underlying costs of £15.5m relating to the integration of Mouchel, as forecast;
- Net debt position better than expected at £174m (30 June 2015: net debt £141m), after £26m investment in the future growth of the Group and reflecting a good working capital performance with strong operating cash conversion;
- Underlying earnings per share of 37.1p (December 2014: 42.4p), down 12% following the issue of new shares for the acquisition of Mouchel; and
- Interim dividend increased by 12% to 21.5p (December 2014: 19.2p), reflecting the Board’s confidence.
- 75% of the Group’s turnover from infrastructure services, regional building and housing; aligned to growth markets with high visibility of forward pipelines;
- Integration of Mouchel substantially complete; aiming to exceed the 2017 cost synergy target;
- Construction and Services order book of £9bn with potential extensions of a further £3.1bn; Property division with pipeline of >£1bn;
o Good performance, second-half weighted, on course for >15% ROCE for the full-year;
o Revenue of £162m up 80%, completions increased by 35% to 959 units, with strong forward sales position;
o Record revenue of c.£1bn up 15%, operating profit of £19.5m, resilient operating margin of 2.0% (December 2014: 2.2%);
o Strong order book (secured and probable) of £3.5bn (30 June 2015: £3.5bn), fully secured for 2016.
o Revenue of £842m up 48%, operating profit of £39.9m up 68%, improved operating margin of 4.7% (December 2014: 4.2%), reflecting six months of Mouchel trading in addition to stable underlying performance;
o Robust order book (secured and probable) of £5.5bn (30 June 2015: £5.8bn), fully secured for 2016.
– ENDS –
There will be a presentation of the interim results to analysts at 0900 hours on 17 March 2016 at the London Stock Exchange. The presentation will be recorded and the video will be available later in the day on Kier’s website.
Notes for editors:
Kier Construction is part of the Kier Group – a FTSE 250-quoted company and a leading integrated property, residential, construction and services group.
Kier Construction has provided a high quality service to clients throughout Scotland for over 40 years, exceeding expectations by helping clients get the most from their budgets with the highest possible build quality. With offices in Glasgow, Aberdeen and Inverness, Kier Construction has a strong presence across Scotland and continues to develop in the region, with an increase in the breadth and depth of core skills being provided to its ever-growing client base.
Health – One of five principal supply chain partners on the NHS’ £600m Health Facilities Scotland framework and has recently been appointed to deliver a £17m backlog maintenance programme with NHS Grampian through the Health Facilities Scotland Frameworks 2 for Aberdeen Royal Infirmary.
Education – Currently delivering several education projects across Scotland including the £43m William McIlvanney Campus for 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, a £13m primary school joint campus and community facility for The Highland Council in Fort William
National Frameworks – In addition to being one of five principal supply chain partners on the NHS’ £600m Health Facilities Scotland framework, Kier Construction is an equity stakeholder in hub South West Scotland, which will deliver £600m of infrastructure investment in south-west Scotland over the next decade. The company is also delivering over £15m of minor works projects as part of the £1.5bn Scape National Minor Works Framework.
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