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Thu May 06 2021

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Kier returns to profit

21 Sep 17 Kier Group has largely completed its restructuring and returned to profit, its latest accounts show.

In the year to 30th June 2017 Kier Group reported a pre-tax profit of £25.8m on revenue up 5% to £4.27bn. The previous year it lost £15m before tax.

Operating profit for the year was up 3% to £146m (2016: £141m).

The latest results at Britain's third biggest construction contractor were impaired by one-off costs: the closure of the Caribbean and Hong Kong businesses resulted in non-underlying charges of £86m. But the sale of Mouchel Consulting in October 2016 generated a profit on sale of £40m.

Kier is now solidly focused on construction, with building, infrastructure and housing now representing 90% of its revenue and profit. The construction division continues to make a loss, widening to £10.1m this time from a £3.2m loss the previous year. However, it bagged a record £3bn of new contracts in the year. Revenue was up 6% to £2,019m (2016: £1,901m) with an underlying operating profit increase of 2% to £39.8m (2016: £38.9m). Underlying operating margins were maintained at around 2.0% (2016: 2.0%).

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Chief executive Haydn Mursell said: "Our underlying performance for the year was good. Having simplified our portfolio, the group is more focused and able to pursue its growth ambitions in our three core markets; building, infrastructure and housing, which now represent 90% of the group's revenue and profit. We continue to invest in the business to improve our operational efficiency, providing a robust platform on which to take advantage of the strong long-term fundamentals in these core markets.

“Our Construction and Services order books of £9.5bn, together with our c.£2bn property development and residential pipelines, provide good long-term visibility of our future work. This visibility, coupled with our healthy balance sheet, provides us with confidence of achieving our Vision 2020 strategic targets."

He added: “We are progressing well with the roll-out of our £70m investment in a new Oracle ERP system with 70% of the group now operating on the new platform. This system provides high quality and timely information, together with improved back office systems and efficiencies.”

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