Maintenance services, property and construction group Kier (KIE) delivered a resilient full-year performance, although poor weather and restructuring costs in the UK construction business pulled headline profits lower. Underlying pre-tax profit fell, too, but by a more modest 9 per cent to £63.4m.
Still, the construction division's targeted revenue for next year, and 95 per cent of the services division's targeted revenue, is already secured and probable. What's more, new contract wins have maintained the forward order book at a healthy £4bn - add in July's acquisition of May Gurney and that rises to £5.9bn.
The services division benefited from existing contract renewals and revenue was little changed at £437m, while operating margins eased from 4.5 per cent to 4.4 per cent. Activity in the coming year will be higher, though, following May Gurney's integration. On the property side, operating profit fell from £22m to £20.5m but, since the year-end, Kier has announced an acceleration of the £100m regeneration of the former Swan Hunter shipyard in partnership with North Tyneside council. Meanwhile, in June, Kier secured a £240m contract to regenerate land around Watford General Hospital.
Broker Investec Securities expects adjusted pre-tax profit of £71m for 2014m, giving EPS of 99.5p, rising to £89.5m and 123.6p for 2015 (from 136.2p in 2012).
| KIER (KIE) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,641p | MARKET VALUE: | £898m | |
| TOUCH: | 1,640-1,647p | 12-MONTH HIGH: | 1,678p | LOW: 1,099p |
| DIVIDEND YIELD: | 4.1% | PE RATIO: | 17 | |
| NET ASSET VALUE: | 285p* | NET CASH: | £60m | |
| Year to 30 Jun | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 2.11 | 24.8 | 44.0 | 55.0 |
| 2010 | 2.06 | 57.7 | 108 | 58.0 |
| 2011 | 2.12 | 72.5 | 166 | 64.0 |
| 2012 | 2.07 | 63.0 | 143 | 66.0 |
| 2013 | 1.98 | 43.0 | 95.8 | 68.0 |
| % change | -4 | -32 | -33 | +3 |
Ex-div: 18 Sep Payment: 27 Nov *Includes intangible assets of £30m, or 55p a share | ||||
