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Kier Group plc (LSE:KIE), a leading UK infrastructure services, construction, and property group, has announced impressive results for the year ended 30 June 2024 ("FY24"). The Group demonstrated robust revenue growth and improved profitability, marking a significant period of financial stability and strategic advancement.
Financial Highlights
Kier reported a notable 17% increase in revenue for FY24, reaching £4.1 billion, driven by strong operational delivery across its various divisions. This growth reflects the Group’s effective execution of its strategic objectives and operational improvements.
Profitability and Margins:
- Adjusted operating profit rose by 14% to £150.2 million, compared to £131.5 million in FY23.
- The adjusted operating margin increased to 3.8%, surpassing the medium-term target of approximately 3.5%.
- Reported operating profit saw a significant 27% uplift, reaching £103.1 million, up from £81.5 million in the previous year.
Earnings and Cash Flow:
- Adjusted basic earnings per share (EPS) improved by 7% to 20.6p, up from 19.2p in FY23.
- Free Cash Flow for the year was £185.9 million, outperforming the £132.3 million recorded in FY23. The operating free cash flow conversion was a strong 144.5%.
- Kier’s net cash position reached £167.2 million, more than double the previous year-end figure of £64.1 million. Average month-end net debt was halved to £(116.1) million from £(232.1) million.
Strategic Developments
Order Book and Acquisitions:
- Kier’s order book grew by 7% to £10.8 billion, providing significant visibility over FY25 and beyond. This high-quality order book underscores the Group’s strong market position and future revenue security.
- The acquisition of Buckingham Group's rail assets has been fully integrated, performing ahead of pre-acquisition expectations, and contributing positively to the Group's performance.
Refinancing and Dividends:
- Kier successfully completed a refinancing of its facilities, extending the revolving credit facility (RCF) maturity to 2027 and Senior Notes to 2029. This refinancing enhances the Group’s financial flexibility and stability.
- The Group proposed a final dividend of 3.48p per share, in addition to the interim dividend of 1.67p, totaling 5.15p per share for FY24. This reflects Kier’s commitment to returning value to shareholders while maintaining a strong balance sheet.
Future Outlook and Sustainable Growth
Kier has announced a new long-term sustainable growth plan following the successful delivery of its FY21 medium-term value creation plan. The Group’s current trading is in line with Board expectations, and the strategic focus remains on leveraging its operational strengths and market position to drive future growth.
