The construction group is back in the black, posting a pre-tax profit of £5.6m in its results for the year to 30 June 2021. Total revenue was £3.3bn.
In trading updates, Salford Quays-headquartered Kier had been cautiously optimistic, after posting a loss of £225m in 2020, a number that was only a slight improvement on 2019’s £229m loss.
Group revenue actually declined, from £3.48bn, as the firm withdrew from what it described as non-core and loss-making contracts. The Kier Living residential business was sold to the Guy Hands-backed Foster BidCo in April for £110m, which together with a successful equity riae of £240m brought in £350m.
Recent contract awards include being named to a £50m enabling civil works programme for phase 2a of HS2, winning a place on the Ministry of Justice’s £1bn new prisons programme, and being appointed to a £200m highways project for Transport for London.
Within the region, a pre-let was secured with Leonardo Hotels, which has now agreed on a 35-year lease on a 284-bedroom hotel at the Pall Mall development in Liverpool, Kier Property’s joint venture with CTP.
Kier’s group order book currently stands at £7.7bn. Although new business wins have been affected by the Covid slowdown, the company said that forward work is underpinned by significant frameworks and opportunities arising from the Government’s infrastructure commitments.
Andrew Davies, chief executive, said: “We have completed the strategic actions set out in 2019 to simplify and focus the group, improve cash generation and strengthen our balance sheet.
“The successful capital raise, the recent sale of Kier Living, and the extension of the group’s revolving credit facility provides Kier with the financial and operational flexibility to continue to pursue its strategic objectives within its chosen markets, and will allow it to further enhance and capitalise on its position as a strategic partner to its customers.”
Kier’s share price climbed slightly this morning, going up by 0.32%.
Davies concluded: “Current trading is in line with our expectations, and despite inflationary pressures and the impact of increased national insurance contributions, our outlook for the current year remains unchanged.
“We are now focused on delivering our medium-term value creation plan by leveraging our attractive market positions, delivering our high-quality order book and fostering our long-term customer relationships and sector expertise.”