Cambridge and Bedfordshire property business Kier Group plc saw its share price increase 33p to 1,073p and its market cap top $1.3 billion after it defied market negativity following the collapse of Carillion to report excellent returns for the year to June 30, bolstered by a record order book.
Kier, which had posted a £14.2m pre-tax loss in the 2017 financial year, bounced back by reporting £106 million in PBT. Reported group revenue increased slightly to £4.2 billion from £4.1bn.
CEO Haydn Mursell said record order books of £10.2bn provided confidence for the future. The proposed full year dividend per share has been increased by two per cent to 69p.
Mursell (pictured) said: “I am pleased to report a good set of results with all divisions performing well. We have launched the Future Proofing Kier programme which will streamline the business thereby enabling us to deliver a more efficient service to clients, respond to changes in our markets and capitalise on growth opportunities, whilst, importantly, also accelerating the reduction of the group’s net debt position.
“Our strong market-leading positions, our record £10.2bn Construction and Services order books, and our £3.5bn property development and residential pipelines, will see the group deliver on its Vision 2020 targets.
“In addition, the Future Proofing Kier programme positions the group well for an improvement in operating margins and higher cash generation, culminating in a net cash position for FY21.”
The Future Proofing Kier programme is focused on simplifying and streamlining the group’s operations and enabling Kier to be more responsive to client needs.
Mursell says the actions taken during FY19 will deliver annual profit and cash flow improvements of at least £20m in FY20, representing at least 10 per cent of profit from operations, together with targeted proceeds of £30-50m from the disposal of non-core businesses.
This programme will help the group achieve its target of year-end net cash and average net debt of c.£250m in FY21.
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