Kier's diverse revenue stream helped to push the group's operating profits up by 5 per cent to £74.4m in the 12 months to June 2012, with weakness on the construction side more than offset by a strong performance in the property division.
Profits from the property business jumped from £15.3m to £22m and Kier is looking to use some of its free cash to boost property development further. The business currently has a pipeline of £750m, including a mixed use scheme in Manchester with partner Siemens which has a build value of up to £150m. On the construction side, stiff competition trimmed margins and left operating profits down 10 per cent at £39.3m. However, around 95 per cent of the division's targeted turnover and 91 per cent on the services side is either secured or probable for the current financial year, and the group forward order book was maintained at £4.3bn.
Trading on the services side also came under pressure as lower public sector budgets hit planned maintenance work, so although margins held steady, operating profits slipped from £21.7m to £20.1m.
Exceptional items distort the reported figures in our table, but on an underlying basis EPS rose 6 per cent to 156.9p. On the same basis broker Peel Hunt is forecasting current year adjusted EPS of 141p.
| KIER (KIE) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,356p | MARKET VALUE: | £537m | |
| TOUCH: | 1,351-1,356p | 12-MONTH HIGH: | 1,489p | LOW: 1,089p |
| DIVIDEND YIELD: | 4.9% | PE RATIO: | 10 | |
| NET ASSET VALUE: | 385p* | NET CASH: | £129m | |
| Year to 30 Jun | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | 2.37 | 63.4 | 131 | 55.0 |
| 2009 | 2.15 | 24.8 | 44 | 55.0 |
| 2010 | 2.10 | 57.7 | 108 | 58.0 |
| 2011 | 2.18 | 72.5 | 166 | 64.0 |
| 2012 | 2.07 | 63.0 | 143 | 66.0 |
| % change | -5 | -13 | -14 | +3 |
Ex-div: 19 Sep Payment: 28 Nov *Includes intangible assets of £29m, or 73p a share | ||||
