London-based projects flatter profits for Kier

CONSTRUCTION firm Kier Group yesterday reported a two per cent rise in full-year profit, as strong growth in its London-based operations helped to buoy profit.

The FTSE 250-listed construction company, whose operations range from building power stations to providing outsourcing to local authorities, posted pre-tax profit of £70m in the year to 30 June, up from £68.9m last year.

It reported a strong performance in its property division, as profit jumped 44 per cent to £22m largely thanks to a development project with Network Rail, which allows Kier to build housing and hotels above certain railway stations.

The construction division was not quite as rosy though, and revenue over the period fell four per cent to £1.32bn.

Data at the start of September showed that British construction slumped in August, as new orders fell at the fastest pace since the height of the 2008 financial crisis.

Kier increased the dividend by three per cent to 66p yesterday, which the company said reflected its confidence in the business.

Chief executive Paul Sheffield told City A.M. that the strong pipeline of work in London has helped to flatter Kier’s revenues.

Kier, which built the new roof at Kings Cross station, said it had £250m worth of work developing the area around Kings Cross, as well as projects with University College London and Crossrail.

Sheffield defended Kier’s construction business, adding that there is a significant pipeline of work – helped by recent contract wins from Siemens and Watford Health Campus – which should help to sustain profits.