Kier's housing and contracting double-act, long abandoned by its rivals, is proving mighty attractive to fund managers, perhaps harking back to the good old days when every self-respecting construction group also built houses. Chief executive Colin Busby's low-risk business model – steering clear of big-ticket projects in favour of smaller, more manageable deals while maintaining a profitable housing arm – seems to have worked: the group has reported record profits for the past nine years. Margins may be a bit low, but investors like the thought that Kier is unlikely to be hit by huge contract losses such as those that crippled Laing.
This enthusiasm from the City has meant that the group's share price has consistently out-performed its rivals' – small and large – over the past year. Kier's share price has jumped 48% from 477p last June to 706p this week. During that period Kier outperformed the FTSE by 74% and increased its market capitalisation to £244m. Not bad for a contractor set up 10 years ago after a management buyout and with a significant staff shareholding.