Shareholder payouts last made in first half of 2018/19 financial year
Analysts are expecting Kier to resume dividend payments in 2024 as the firm continues to repair its balance sheet.
The firm last paid a dividend in the first half of its 2018/2019 financial year but then new chief executive Andrew Davies, who joined in April 2019, said no dividends would be paid for 2019 and 2020 because of its perilous financial position.
After turning in a pre-tax profit of £106m for the year to June 2018, the firm sank to successive annual losses of £245m and £225m.
It returned to the black in the year to June 2021 with a £5.6m pre-tax profit and yesterday said this had tripled to £15.9m for the year to June 2022.
But its bottom line was hobbled by £40m of ongoing restructuring costs plus a further £35m of adjusting items.
One source said: “They’re out of the danger zone but turning companies around takes longer than you expect.”
Kier added that it expected average month-end net debt to climb next year from the £216m it posted this year, which was down from £432m in 2021.
In a note, broker Numis said: “Guidance for this to increase in FY23 is likely to attract focus, however this is due to the decision to completely pay down the supply chain financing facility and repayment of HMRC C19 deferrals.”
Numis said it expected average month-end net debt to be around £245m in 2023 but forecast this to fall to £145m the following year “providing line of sight of sustainable net cash and we therefore expect the dividend to be reinstated in the year”.
In its note, Liberum said: “We increase our FY23 average net debt estimate from £169m to £251m but expect an improvement in FY24, making a dividend possible.”
Peel Hunt said it expected the figure next year to be around £250m “which should reduce rapidly” in 2024. It added that a dividend could be paid out in the second half of 2024.
Kier is focussing on core infrastructure and construction work mainly in the public sector after selling its housing arm last year and quitting environment work while paring back its FM business.
It said that revenue last year was flat at £3.3bn with its target by 2026 due to be somewhere between £4bn and £4.5bn.
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