Kier increases dividend but profits decline

Suzie Neuwirth
FTSE 250-listed construction group Kier yesterday said it was optimistic about a UK economic recovery and increased its full-year dividend by three per cent, despite a fall in revenue and profit.

The firm, which acquired support services provider May Gurney in July, posted a nine per cent decline in pre-tax profits to £63.4m, in line with management’s expectations.

Revenue fell by four per cent to £2bn, which Kier said was mainly due to poor weather in the first quarter causing delays to construction projects and pushing revenues into the 2014 financial year.

The dividend was increased to 68p.

“The modest decline in revenue and profit reflects the tough trading conditions the industry has faced during the year,” said chief executive Paul Sheffield. “After nearly five years of recessionary pressure, we are seeing positive signs of improvement in all our principal businesses, which gives rise to cautious optimism that the economy is recovering.”

Britain’s construction sector is finally starting to pick up again after the financial crisis. It grew at its fastest rate since September 2007 this August, according to a survey of professionals last week.

Kier said that the bulk of its targeted revenue for its construction and services divisions for 2014 has already been secured. It said that its combined order book after buying May Gurney now stands at £5.9bn across those two divisions and stretches beyond 2020.

Shares closed 1.3 per cent lower yesterday at 1,645p.