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Gloucestershire Business News

Kier doubles profits thanks to strong construction arm

Profits at Kier Group have doubled thanks to a strong performance from its construction arm.

The country's second biggest contractor is involved in major building projects in Gloucestershire including the Forum in Gloucester and the A417 'Missing Link' highway project.

Half year figures announced yesterday show its pre-tax profit jumped from £12.7million to £25.4m with operating profit edging up 6% to £57m. Kier said its operating margins now stood at 3.7%, above its 3.5% target.

Income for the six months to December 31, 2022 was unchanged at £1.5billion.

Turnover from its construction business was up 4% to £704m but operating profit doubled to £25.6m.

It raised its order book by over a quarter to £10.1bn with the firm saying that 96% of workloads have been secured for the current financial year.

Andrew Davies, chief executive, said: "Our order book has increased significantly against the prior year, reflecting a large number of contract wins across our divisions and this provides us with good, multi-year revenue visibility. These awards reflect the bidding discipline and risk management now embedded in the business.

"Looking ahead, we expect to generate positive operating cashflow for the full year and deliver a net cash position at the year-end. Current trading remains in line with the Board's expectations despite political and economic uncertainties.

"The Group is well positioned to continue benefiting from UK Government infrastructure spending commitments and focused on the delivery of a sustainable net cash position and a sustainable dividend, in line with our medium-term value creation plan."

The firm also announced that Ross MacKenzie has been appointed interim group managing director for its infrastructure projects arm, replacing Mark Pengelly who has been appointed as interim boss of its HS2 joint venture, called EKFB, whose board Davies also chairs.

Earlier this week it appointed David Hollywood  as operations director for health major projects, further strengthening Kier's experience in delivering for the health sector.

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