(Alliance News) - Construction firm Kier Group PLC on Thursday reported an annual profit rise and said it has kicked off its new financial year in decent shape, despite inflationary pressure.
The Manchester-based firm reported pretax profit of GBP15.9 million in the year ended June 30, up from GBP5.6 million a year earlier.
Profit was boosted by finance costs falling 28% to GBP29.9 million from GBP41.8 million.
Revenue declined, however. Revenue including its share of joint-ventures fell by 2.2% to GBP3.26 billion from GBP3.33 billion. Excluding its share of joint ventures, revenue weakened 3.6% to GBP3.14 billion from GBP3.26 billion.
"The performance over the last 12 months reflects our significantly enhanced resilience and strengthened financial position," Chief Executive Andrew Davies said.
"Over the last two years Kier has undergone a transformation, rationalisation and recapitalisation and the group is delivering against its medium-term value creation plan."
Looking ahead, Kier's medium-term annual revenue target is between GBP4.0 billion and GBP4.5 billion, with an adjusted operating profit margin of about 3.5%. It also plans a sustainable dividend over the medium term. Its last dividend was for the first half of the year ended June 2019.
Its margin for financial 2022 was ahead of the medium term target, at an "industry leading" 3.7%, improved from 3.0%.
Kier's order book stands at GBP9.8 billion, up from GBP7.7 billion a year earlier, offering it "certainty against the wider market backdrop". It said 85% of its revenue for the current financial year is secured.
The new year has started decently, CEO Davies said.
"The group is well positioned to continue benefiting from UK government infrastructure spending commitments," he said.
"The new financial year has started well and we are trading in line with our expectations, despite continued inflationary pressure and see no change in the current market outlook. We remain focused on the delivery of a sustainable net cash position and sustainable dividend policy, in-line with our medium-term value creation plan."
Shares in Kier were 4.8% lower at 71.70 pence each in London on Thursday morning.
By Eric Cunha; ericcunha@alliancenews.com
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Kier (KIE)