With a streamlined business portfolio and improved contributions from all four divisions, Kier (KIE) delivered full-year figures in line with consensus, but with adjusted gross profit more or less flat from 2016 at £383m. Post-tax profit was held in check by £86m in charges linked to the closure of operations in both Hong Kong and the Caribbean, but strip out exceptional items and underlying earnings were up 7 per cent to 106.8p. The rationalisation of the portfolio – including the disposal of Mouchel Consulting – has now been “substantially concluded”, so management anticipates that “no further material costs will be incurred” in this regard.
This good housekeeping extended to Kier’s working capital performance, resulting in a 39 per cent reduction in net debt since the 2016 calendar year-end. Meanwhile, operating cash inflows prior to working capital movements came in at £164m, representing a cash conversion rate at 113 per cent of operating profit.
The construction division (49 per cent of group revenue) revealed a record £3bn in contract awards during the period and has secured 90 per cent of target revenue for FY2018. The group order book stood at £9.5bn midway through July, boosted by the acquisition of McNicholas – a UK engineering services provider.
Broker Peel Hunt gives adjusted pre-tax profit of £140m for the June 2018 year-end and to EPS of 118p, against £126m and 106p in FY2017.
KIER (KIE) | ||||
ORD PRICE: | 1,170p | MARKET VALUE: | £1.14bn | |
TOUCH: | 1,167-1,172p | 12-MONTH HIGH: | 1,505p | LOW: 1,078p |
DIVIDEND YIELD: | 5.8% | PE RATIO: | 76 | |
NET ASSET VALUE: | 521p* | NET DEBT: | 22% |
Year to 30 Jun | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
2013 | 1.94 | 25.9 | 62.6 | 54.4 |
2014 | 2.91 | 15.4 | 16.2 | 57.6 |
2015 | 3.28 | 39.5 | 40.2 | 55.2 |
2016 (restated) | 3.99 | -34.9 | -25.7 | 64.5 |
2017 | 4.13 | 25.8 | 15.3 | 67.5 |
% change | +3 | - | - | +5 |
Ex-div: | 28 Sep | |||
Payment: | 1 Dec | |||
*Includes intangible assets of £803m, or 823p a share |