The company said that its construction division is benefitting from high-quality order books which are generating good margins and healthy cash balances. “Our presence on over 60 public and private sector frameworks and our collaborative approach to bidding puts us in a strong position to secure further high quality work, ensuring we maintain our operating margins firmly above 2%,” said Kier.
It has secured approximately £600m of new work since 1 January, putting its order books of secured and probable work at levels in line with previous years. It has securing all of its expected construction revenue for the year to 30 June 2011 and 80% of targeted construction revenue for the year to 30 June 2012. “Our flexibility and responsiveness to changing markets, combined with the diverse range of skills and experience within our workforce, has enabled the business to adapt to changing market and customer demands. This is best reflected in our recent contract awards which, as anticipated, show a shift towards the private sector,” said Kier.
In education, it has been awarded the £48m Isle of Sheppey Academy and the £13m remodelled Tudor Grange Academy in Worcester. It was recently announced as preferred bidder for a £20m academy in Ellesmere Port and has received notices for follow-on schemes approaching £50m. Kier’s NHS ProCure 21+ team was selected in April for five projects with a potential value approaching £70m.
In the private sector, commercial developments in London and the south-east are continuing to come to market and work secured includes a £20m office refurbishment contract at 8-10 New Fetter Lane.
In infrastructure and power, Kier expects to grow significantly over the next few years. Following the £480m Crossrail contracts it won in joint venture late last year, it has been awarded two further contracts in joint venture at Liverpool Street and Whitechapel Stations with a combined value exceeding £50m. Kier is also short-listed on five other Crossrail station projects valued at more than £1.2bn.
In power, its gas-fired station project for EDF at West Burton is almost complete and it is bidding for major contracts for EDF on the Hinkley Point nuclear power station. It has recently been awarded a £40m energy from waste project in Plymouth and is actively bidding on two carbon reduction projects at Eggborough and Aberthaw to clean up emissions from existing coal-fired stations.
Work on the MTR Corporation's Express Rail Line project in Hong Kong has started well and a further significant award has been secured on the MTR South Island Line (East) project with the award of Admiralty Station in joint venture under a target cost arrangement, with Kier's share equating to £82m. In Jamaica it has secured a £6m infrastructure project for a 66MW power station in Kingston.
The services division has traded in line with expectations over the period, maintaining a £2bn order book.
The developments business remains a key generator of integrated opportunities for the group. In April, Kier announced the acquisition of Lloyds Banking Group's 50% interest in a jointly owned property portfolio for £91m.
Private housing volumes have improved throughout the period and Kier is selling from more sites and remains on track for more than 500 unit sales during the current financial year.
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