Kier Group ends first half as expected, launches £20m buyback
By Josh White
Date: Tuesday 21 Jan 2025
(Sharecast News) - Kier Group said in an update on Tuesday that trading for the first half of its financial year was in line with the board's expectations, with performance expected to be second-half weighted, consistent with prior years.
The FTSE 250 company said its order book increased by about 2% to £11bn compared to the year-end position of £10.8bn, providing a high level of revenue visibility with over 95% secured for the 2025 financial year.
Recent contract wins included a place on Yorkshire Water's £850m AMP8 framework for complex non-infrastructure works, a £240m contract from the Ministry of Defence for new accommodation at Keogh Barracks, and a position on the NHS Shared Business Services decarbonisation framework worth £500m over four years.
The group said it was also awarded a place on Pagabo's £814m facilities management framework, offering services to public sector clients.
Kier reported a continued focus on cash management and operational delivery, with an expected net cash position at the end of the first half exceeding the prior year's £17m.
Average month-end net debt reduced significantly to approximately £38m, compared to £136.5m in the prior period, reflecting the group's ongoing deleveraging efforts.
The company also announced the launch of a £20m share buyback programme, reflecting its strong cash generation and commitment to returning value to shareholders.
That followed the resumption of dividend payments during the 2024 financial year.
Kier said its capital allocation priorities remained focussed on supporting business investment, maintaining a strong balance sheet, and pursuing value-accretive opportunities, with any excess capital returned to shareholders.
The buyback programme would be conducted by Peel Hunt on behalf of the company, with purchases made on the London Stock Exchange and other venues under pre-set parameters.
Kier said the programme, starting on Tuesday, would run until the total purchase price reached £20m, with up to 10% of the company's issued share capital eligible for repurchase.
The firm's board said it remained confident in the group's strategic position and growth prospects, citing opportunities in key government priority sectors such as transport, education, healthcare, defence, and regulated industries like water.
Kier said it would report its half-year results on 11 March.
"Kier has delivered a strong first half performance, in line with our expectations," said chief executive officer Andrew Davies.
"The strength of our cash generation combined with the multi-year revenue visibility afforded by our growing quality order book and underpinned by our strong balance sheet, gives us the confidence that this momentum will continue."
Davies said the company continued to be well positioned to benefit from UK government and regulated industry infrastructure spending plans into areas where Kier offered "market-leading services", notably transport, education, healthcare, justice, defence, nuclear and water.
"Given our order book growth combined with our continued de-levering and greater confidence that we will achieve an average month-end net cash position, we have announced today a £20m share buyback, as part of our evolved capital allocation policy to maximise shareholder returns."
At 1120 GMT, shares in Kier Group were up 4.77% at 145p.
Reporting by Josh White for Sharecast.com.
Email this article to a friend
or share it with one of these popular networks:
You are here: news
10 Lower Thames St,
London EC3R 6EN