Construction group posts leap in half-year pre-tax profit
Kier has posted a jump in half-year pre-tax profit despite suffering a £33m hit on the closure of its Caribbean arm.
The construction group posted pre-tax profit of £34.9m for the second half of 2016, up from £4.3m the previous year. Revenue was unchanged at £2bn and the firm’s order book stood at £9bn.
Kier blamed the £33m writedown in the Caribbean to one “challenging project” which it said “we continue to progress”. It expects to fully quit the region “within the next six months”.
However, the firm’s bottom line was boosted by £39m profit on the sale of Mouchel Consulting to WSP in October.
Kier’s underlying half-year pre-tax profit - which strips out one-off costs - was up 12% to £46.3m, up from £41.5m, with the firm hailing a strong contribution from its construction division.
Kier’s construction division posted a 19% rise in underlying operating profit to £20.8m, up from £17.5m, while margins edged up to 2% from 1.9%. Revenue also increased, up 8% to just over £1bn, up from £945m.
Kier also announced a new housing joint venture and the hire of a new chairman.
The JV is with east of England housing association Cross Keys, with Kier set to transfer land and projects to the new vehicle for cash to reinvest. Kier is transferring an initial £97m worth of assets for a £64m return.
Kier also announced it has hired energy boss Philip Cox as its new chairman, who will replace the retiring Phil White.
Cox is chairman of Drax Group and a former chief executive of Global Power Generation. He will replace White at Kier’s AGM this November.
Commenting on the interim results, Haydn Mursell (pictured), chief executive at Kier, said: “Today’s results reflect the ongoing financial and operational discipline employed across the group and the strength of our flexible, integrated business model.
“The group’s breadth provides some resilience against economic uncertainty and we continue to shape Kier to focus on our core competencies.”