Kier Group reports solid full-year growth

12th Sep 2024 07:22

(Sharecast News) - Kier Group reported significant growth and debt reduction in its full-year results on Thursday, driven by strong operational performance across its divisions.

The FTSE 250 company said its revenue grew 17% over the 12 months ended 30 June, to £3.97bn, while adjusted operating profit rose 14% to £150.2m, surpassing the prior year's £131.5m.

Its adjusted operating margin of 3.8% exceeded its medium-term target of 3.5%, reflecting improved profitability.

Adjusted earnings per share increased 7% to 20.6p.

The firm said it made substantial progress in reducing its debt, with net cash more than doubling to £167.2m, up from £64.1m the prior year.

Average month-end net debt was halved to £116.1m, compared to £232.1m in the 2023 financial year.

Free cash flow also saw a strong improvement, rising to £185.9m from £132.3m in the prior year, with a free cash flow conversion rate of 144.5%.

Kier said its order book grew 7% to £10.8bn, providing it with strong visibility for the 2025 financial period and beyond.

The group also successfully integrated the rail assets of Buckingham Group, which it acquired earlier in the year.

It said the acquisition was performing ahead of expectations, contributing to its solid performance.

In terms of financial stability, Kier completed a refinancing that extended its revolving credit facility (RCF) to 2027 and its senior notes to 2029.

The company also declared a final dividend of 3.48p per share, bringing the total dividend for 2024 to 5.15p.

Kier announced a new long-term sustainable growth plan following the successful execution of its 2021 medium-term value creation plan.

The company said its current trading was in line with the board's expectations, as it continued to focus on delivering growth while maintaining its strong financial position.

"The past three years have seen the group achieve significant operational and financial progress," said chief executive officer Andrew Davies.

"The strong results for 2024 are testament to the hard work and commitment of our people who have enhanced our resilience and strengthened our financial position in-line with our medium-term value creation plan.

"Our order book remains strong and growing at £10.8bn and provides us with good multi-year revenue visibility."

Davies said the contracts within the firm's order book reflected the bidding discipline and risk management now embedded in the business.

"I am also pleased to report that the group significantly reduced its average month-end net debt position as well as improved its year-end net cash position.

"I am confident we can sustain this momentum going forward."

The group started the new financial year well and was trading in-line with the board's expectations, Andrew Davies added.

"The group is well positioned to continue benefiting from UK government infrastructure spending commitments and we are confident in sustaining the strong cash generation evidenced especially over the last two years allowing us to significantly deleverage, increase dividends to shareholders and deliver the evolved long-term sustainable growth plan which will benefit all stakeholders."

At 1004 BST, shares in Kier Group were down 2.91% at 145.83p.

Reporting by Josh White for Sharecast.com.