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Page 21 Contractors World - UK & Ireland Vol 1 No 6

Few complaints from Kier as profits increase

Video of Kier fnancial performance

Commentng on the preliminary fnancial results for the year to 30 June 2011, Kier Group chief executive, Paul Sheffield, said: “Kier has had another successful year in a tough economic environment; underlying revenue and profit before tax are well ahead of last year and cash generaton has been very strong, with average month-end cash balances at a high level.

“Our diverse skills and integrated business model have provided greater resilience during these challenging economic conditons. We are encouraged by the prospects we see in markets such as power and waste, in mixed-use regeneration and in the growth we see in public sector outsourcing.

“Kier contnues to beneft from its long-term client relatonships and the numerous frameworks in which we are involved. Our network of local offices allows us to respond to the ever-widening requirement of customers for local capability to deliver ‘bundled’ services.

“We have announced a full-year dividend of 64 pence per share, a 10% increase on last year. This demonstrates the strength of our fnancial position and the confidence we have in our business going forward. Although we expect the next 12 months to be challenging, we remain confdent that our positoning across a wide spectrum of service areas,will enable us to deliver a good performance in the new fnancial year.”

Key points

• Full year dividend up 10% to 64p (2010: 58p)

• Exceptional items total a credit before tax of £7.0m (2010: charge of £2.0m)

• Net cash at £165m (2010: £175m) after investment of approximately £50m during the year, with average month end net cash of £129m (2010: £95m)

• Construction margins improved to 2.7% (2010: 2.6%) and Services margins resilient at 4.5% (2010: 4.5%)

• Order books for Constructon and Services increased to £4.3bn (2010: £4.2bn), with a strong pipeline of further opportunites

For more informaton: Kier Group

inf rastructure to any economi c recovery makes the larger downturn in orders in that sector a cause of partcular worry.

A CECA director commented: “It ’s hard to see any silver lining on this particular cloud. No one was expecting stellar order figures, bearing in mind the impact of public spending cuts and the more general economic environment both here and abroad, but it’s the sheer scale of this drop that is concerning.” “Const ruct ion orders are an excellent barometer of confidence in the economy, and these figures clearly do not augur well. Without a general recovery of confidence to the UK economy there will be more hard times ahead for construction firms, already enduring the leanest period in recent memory. There is now a risk to the survival of many firms across the country, and with it the employment and training of many skilled employees.

“Government has done a lot of work around construction in recent months to encourage investment and cut inefficiencies, and we’ve always been supportive of their efforts. But figures like these show how urgent it is that the good words we have heard are turned into actons, because right now the long-awaited private sector-led recovery seems very distant indeed.

After the bad news . . hope or more political rhetoric?

Subsequent to this statement from the association, Nick Clegg, Deputy Pr ime Minister, speaking at the Liberal Democrat Party conference reiterated the Government and the party ’s commitment to handl ing the economic crisis and putt ing place necessary st imul i such as infrastructure investment to help economic growth.

Respond i ng to Ni ck C l egg ’s s p e e c h , t h e n o n p o l i t i c a l , Construction Products Association expressed its disappointment saying that , despi te the government ’s

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