Kier has issued a positive trading statement following the end of its financial year on 30 June 2010, reporting healthy cash balances and strong forward orders.
The construction group said cash stood at a record level of over £170m (30 June 2009: £93m).
Its construction division has enjoyed “strong operating margins” and its order book of “signed contracts and preferred bidder and negotiated positions” means it has secured nearly 90% of targeted revenue for 2011.
The statement said: “We are seeing signs of the private commercial market returning as previously mothballed projects are being resurrected with private funding becoming available.
“Our exposure to the Building Schools for the Future programme is limited and, therefore, we anticipate that the reduction in the programme, announced last week, will not have a material impact on our order book and probable orders.”
Kier said despite further cuts to public sector expenditure it expected growth in the following sectors: power; utilities; rail; waste; mixed-use developments; and international projects.
In support services, where the firm provides maintenance services to social housing clients, Kier said its portfolio of homes has grown to around 240,000, which makes it one of the top five providers in the market.
Kier has continued its strategy of reducing investment in its Partnership Homes business, and sold 1,060 social and private homes during the year (30 June 2009: 1,140 units).
It added: “Selling prices have stabilised and visitor levels, whilst reducing since the election, have been steady over the last six months.”
The statement concluded: “Whilst we continue to operate in a challenging environment, our integrated business model provides us with the ability to seek out and create new opportunities.”
Kier expects to announce its preliminary results for the year ended 30 June 2010 on 16 September 2010.