20 September 2018 | Herpreet Kaur Grewal
Kier has reported a 9 per cent jump in underlying profits in its results for the year ended 30 June 2018, published today.
Underlying revenue was up 5 per cent and underlying profit from operations was up 10 per cent and underlying earnings per share was up 9 per cent, according to the results.
The results also show that the housing maintenance sector continued to undergo significant change following budgetary challenges faced by local authorities and the impact of the Grenfell tragedy.
Consequently, the business has extended its mix of clients with increasing focus on housing associations and private sector clients. This change has resulted in a number of new awards and extensions including three new contracts replacing incumbent suppliers, and with an increased focus on fire-risk assessments, the business has strengthened its capability in this field.
The property services team continues to maintain its profile in the public and private sectors. During the year, new contracts were mobilised with the British Red Cross, the Home Office, Moorland and High Peak Councils and The Office Group.
On 17 September, the group exchanged contracts for the sale of its pension administration business, acquired with the Mouchel acquisition. Completion is expected in the first half of this financial year for a total consideration of up to £3.5 million in cash.
The business also maintained its position as the lead supplier to Highways England, following Carillion's liquidation. On 15 January, when Carillion Plc went into liquidation and consequently forfeited its share of the Smart Motorways joint venture, Kier assumed 100 per cent of the assets and liabilities of the contract. No consideration was payable for Carillion's share. This transaction has been accounted for as an acquisition of trade and assets, resulting in the recognition of £5.2 million of net assets and profit, before related costs, according to the financial statement.
Chief executive Haydn Mursell 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, whilst, importantly, also accelerating the reduction of the group's net debt position.
"Our strong market-leading positions, our record £10.2 billion construction and services order books, and our £3.5 billion 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 FY2."