Half-year headline figures for Kier (KIE) were distorted by a number of one-off factors, including a windfall gain of £39m on the sale of Mouchel Consulting and an additional £33m of provisions to cover the closure of its Caribbean operation. Underlying profits at the construction and services group showed a 4 per cent improvement at £56.5m.
The construction division accounts for around half of group turnover, and its operating profits grew by 19 per cent to £20.8m, boosted by a strong performance in regional markets outside London. Much of the work procured came through framework agreements, including with the NHS and Gatwick Airport. On the services side, which covers highways and utilities, housing and environmental services, operating profits slipped by 5 per cent to £37.2m, reflecting reduced expenditure on road maintenance, although this has risen significantly since the period-end. The residential division remains on track to deliver 2,200 homes in the full-year, and its underlying profits in the first half grew by 23 per cent to £8.1m.
And there is plenty of work in the pipeline, with a forward order book of around £9bn. Within this, targeted revenue for construction and services is fully secured for the year to June 2017 and 70 per cent for the following year.
Analysts at Numis are forecasting pre-tax profits for the year to June 2017 of £126m and EPS of 107p (from £125m and 105p in 2016).
| KIER (KIE) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,461p | MARKET VALUE: | £1.42bn | |
| TOUCH: | 1,461-1,463p | 12-MONTH HIGH: | 1,496p | LOW: 918p |
| DIVIDEND YIELD: | 4.5% | PE RATIO: | 77 | |
| NET ASSET VALUE: | 593p* | NET DEBT: | 31% | |
| Half-year to 31 Dec | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2015 | 2.02 | 4.3 | 7.9 | 21.5 |
| 2016 | 2.01 | 34.9 | 39.9 | 22.5 |
| % change | - | +712 | +405 | +5 |
Ex-div: 30 Mar Payment: 19 May *Includes intangible assets of £794m, or 815p a share | ||||
