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Confident Kier sees improvements across the group

17 Sep 15 Solid growth in all operating divisions at Kier Group over the past year is being attributed to a revival of economic confidence.

Chief executive Haydn Mursell
Chief executive Haydn Mursell

Kier has reported a 14% rise in revenues for the year to 30th June 2015, reaching £3.4bn (2014: £2.9bn).

Pre-tax profit of £39.5m was more than double the previous year’s £15.4m, while underlying operating profit was up 19% to £103.7m (2014: £87.3m).

There were improvements across all operating divisions.

Revenue in the Construction division was up 15% to £1,721m (2014: £1,498m).  This resulted in an underlying operating profit increase of 25% to £37.7m (2014: £30.2m). Underlying operating margins were resilient at 2.2% (2014: 2.0%) and the working capital position has also improved, the company said.

The order book of secured and probable construction work stands at £3.3bn, which is equivalent to 95% of forecast revenue for the 2016 financial year.

The Services division saw revenue growth of 13% to £1,247m, margins steady at 4.7% and underlying operating profit up 9% to £58m.

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The £265m acquisition of Mouchel in June has increased Construction and Services order book as at 30th June 2015 to £9.3bn (2014: £6.2bn).

In the Property division revenue was £126m (2014: £102m), up 24%, generating an underlying operating profit of £22.7m and delivering a return on capital employed (ROCE) in excess of 15%.

The Residential business, in its first full year operating as a new division, completed 2,130 new units, generated £257m revenue and £11.2m underlying operating profit.

Chief executive Haydn Mursell said: "Economic confidence is returning to our core markets and, furthermore, the acquisition of Mouchel represents a major step in accelerating the group's five-year strategy.

 "All our divisions have performed well. In Property, the market remains strong and we have ample support from funders and other investors.  Following its expansion, our Residential division is well-placed to help address the national shortage of affordable housing. In Construction, the regional building business has an established position on public and private sector frameworks and our infrastructure business is benefiting from continued greater investment by the UK government in infrastructure in the medium term and internationally, the Middle East pipeline is strengthening.”

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