Kier Group (KIE) Investor Update summary

Financial and operational highlights

• Revenue increased 17% to £3,969.4m, with adjusted operating profit up 14% to £150.2m and free cash flow up 41% to £185.9m.

• Order book rose 7% to £10.8bn, providing over 90% revenue visibility for FY 2025.

• Year-end net cash grew 161% to £167.2m, and average month-end net debt halved to £116.1m.

• Dividend reintroduced at 5.15p per share, covered four times by earnings.

• Medium-Term Value Creation Plan targets met within three years, including margin, revenue, and cash flow goals.

Strategic focus and growth outlook

• Transitioning from recovery to a long-term, sustainable growth plan, targeting GDP-plus revenue growth.

• Focus on regulated and government sectors, with c.90% of revenue from public sector and regulated companies.

• Over 90% of FY25 revenue already secured, underpinning confidence in future performance.

• Capital allocation priorities include capex, deleveraging, dividends, property investment, and value-accretive acquisitions.

• Dividend policy aims to move to three times earnings cover over the cycle.

Sector and business unit performance

• Water sector positioned for significant growth, with expanded client base and frameworks covering most of England.

• Infrastructure Services revenue up 16% to £1,988.3m, with adjusted operating profit up 41% to £112.3m; key contract wins in transportation and water.

• Construction revenue up 15% to £1,907.8m, with 97% of FY25 revenue secured; major wins in defence, education, healthcare, and justice.

• Property revenue nearly doubled to £71m, driven by a major student accommodation sale; capital employed in Property increased to support growth.

• Acquisition of Buckingham Group’s rail assets successfully integrated, enhancing rail capabilities.