John Dodds, Kier’s chief executive, this week predicted the UK construction boom would continue for “at least three years”, despite the present credit crunch, and said he was looking to buy a housebuilder and a property company.
Dodds made his comments while announcing that Kier made a profit of £77.6m for the financial year. This result, which is ahead of forecasts and 30% higher than last year, reflects improved margins in the firm’s construction business and greater housebuilding output.
Margins in construction edged up to 1.6% from 1.5%. Dodds said he was “reasonably confident” they would reach 2% over the next year and a half.
More than a third of Kier’s profit came from its housebuilding division.
Commenting on the global credit squeeze, Dodds said: “Everyone wants to talk down the housing market. Six months ago everyone was talking about interest rates. Now it is about mortgage availability. There is a cottage industry in coming up with reasons why the housing market is turning down.”
He added: “Our reservation rates are highly satisfactory, as are market fundamentals.”