Order book solid at Kier

24th Feb 2010 07:09

Contractor and housebuilder Kier delivered profits in line with expectations as it continued to focus on winning work ‘at the right price.’Profit before tax virtually halved to £16.7m in the six months to 31 December 2009 from £31.6m in the corresponding period of 2008. However, that was after taking an exceptional charge of £13.8m, compared to a one-off credit of £6.3m in 2008. The firm was fined £17.9m in 2009 by the Office of Fair Trading (OFT) after the OFT’s investigation into cover-pricing in the construction industry. The company has lodged an appeal with the Competition Appeals Tribunal, protesting against the size of the fine.Underlying profit before tax improved to £30.5m from £25.3m in the second half of 2008. Turnover eased to £1,009.8m from £1,108.7m.Net cash at the end of the year was £38.2m higher than a year earlier at £130.7m, boosted by the sale of the UK Supreme Court investment. Net cash balances over the reporting period averaged £71m, up from £61m a year earlier.The combined order book for the company’s Construction and Support Services divisions improved to £4.5bn from £3.7bn a year earlier. The Construction division has secured all of its targeted revenue for the current fiscal year and has bagged 73% of fiscal 2011’s budgeted revenue.Margins improved slightly in the Construction division to 2.5% from 2.4% a year earlier while the Support Services arm saw margins jump to 4.4% from 4.0%.The Partnership Homes division saw some slippage in completions during the year as a consequence of funding delays and temporary planning issues.An interim dividend of 18.5p has been recommended, up from 18.0p last year.‘The uncertainties surrounding the forthcoming general election together with the public sector deficit give rise to concerns over the future levels of public sector spending. Notwithstanding that, our order book has grown and Kier is on over 50 construction framework agreements, both public and private, which provide comfort that we will grow our market share whilst delivering value to our clients,’ said John Dodds, in his last results announcement as chief executive officer.