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Key FM wins underpin solid interim results for Kier

Kier Group has reported solid half-year results to 31 December 2016, underpinned by the performance of Kier Workplace Services (KWS), which secured contract wins totalling £74 million in the period.

The property, residential, construction and services group is currently building a portfolio of clients in Wales, including a £100 million, 10-year joint venture (JV) contract with Powys County Council, which it will deliver in partnership with Kier Housing Maintenance, and a three-year facilities management contract with Cadw, the Welsh Government’s historic environment service.

The 50/50 joint venture with Powys County Council will see KWS and Kier Housing Maintenance carry out repairs, maintenance, minor works and statutory testing for the council’s housing, public and commercial buildings as well as delivering major building projects such as new schools and providing technical construction advice to the council.

According to the Group, KWS, which was formed in July 2016, has made good progress on retaining and securing public sector works, while growing its private sector presence. As well as a five-year £8 million contract with Imperial War Museums to provide facilities management across its estate of museums and visitor attractions, during the period KWS secured contracts with the London Borough of Lewisham, Kent County Council, Sussex Police, University College London, Norwood and the NHS Business Authority.

KWS is also working with Kier Construction, providing ICT infrastructure in schools where new build and refurbishments are taking place, and providing technical services under the Scape framework.

Commenting on the results, Steve Davies, managing director, Kier Workplace Services, said:

“This is a great set of results for KWS, with significant contract wins across a range of core sectors. We’re building a good reputation for managing prestigious heritage and leisure sites, as well as delivering a range of services for local authority clients.

“The integrated offer of the Group means we can call on the combined knowledge and experience of our team to provide a range of complementary services to clients that offer them a truly end-to-end solution, and we’re looking forward to building on this in the coming months.”

On a Group level, its order book of approximately £9 billion reflects the company’s’ strong pipeline conversion in regional building and highway services, whilst its underlying operating profit came in at £56.5 million, representing an organic growth of four per cent on 2015.

Divisional performance

  • Property has a strong pipeline of >£1bn, and is on course for >15 per cent Return On Capital Employed (ROCE) for the full year.
  • Residential saw revenue increase by four per cent to £169 million, with the division on track to deliver 2,200 units by year end.
  • Construction had an underlying operating profit of £20.8 million, up 19 per cent and a record revenue of  over £ 1billion.
  • Services achieved an operating margin of 4.8 per cent and awarded more than £300 million of highways maintenance contracts in the period.

 

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