Kier Group shares dip as group announces reduced dividend despite growing revenue and profits
Kier Group's share price dropped this morning after the group announced a reduced dividend per share in its results for the year.
Shares were down by 4.4 per cent in early trading, however Kier boss Haydn Mursell said he expected the price to do well throughout the rest of the day.
Kier's proposed full year dividend is up 20 per cent, at £47.3m, however the dividend per share has fallen by four per cent, from 57.6p to 55.2p. Mursell said this was due to the effects of a £312m rights issue the company carried out in June to help fund its acquisition of Mouchel.
Mursell added that the integration of the road maintenance group was going well three months in. The addition of Mouchel has seen Kier's construction and services order book grow to £9.3bn, compared with £6.2bn last year.
“We are already seeing revenue synergies coming through,” he said.
The construction firm saw revenue for the year to 30 June grow by 14 per cent to £3.4bn from £2.9bn last year.
The group's pre-tax profit jumped by 17 per cent, from £73.7m to £85.9m, while operating profit increased by 19 per cent, climbing from £87.3m to £103.7m.
Meanwhile, Mursell highlighted the company's financial position as a reason to be cheerful.
“We are seeing cash pick up after a few tough years,” he said, adding: “We are well secured for the current financial year, and into the medium term future.”