Major construction and infrastructure group Kier yesterday hailed the impact of publicly-funded projects in Scotland as it posted “strong” results for the year to June.
Revenues rose by £1 billion compared to the previous 12 months, marking a 51% hike after the £221 million acquisition of services group May Gurney in July last year.
Post-exceptional pre-tax profits sank 43% to £14.8m after the effect of exceptional charges which totalled £42.2m, but the underlying figure generated optimism after a jump of 59% to £88m.
The company said a solid performance across the UK as a whole had been echoed by “continued growth in Scotland and the north-east of England”.
Its “ever-expanding” client base includes the Scottish Fire Service, which is refurbishing properties at Balmossie in Broughty Ferry and Alloa, and also a £9.5m extension at Aberdeen’s Robert Gordon University.
Kier’s construction arm is one of five principal supply chain partners on Frameworks Scotland 2, the publicly-funded procurement initiative expected to deliver £600m worth of projects to Scottish hospitals over the coming six years.
It recently completed an £8m student accommodation project in Glasgow’s West End, and is working on a £45m retail development with British Land at Glasgow Fort, a £35m project to build a new education campus on behalf of East Ayrshire Council, and a £40m education campus on behalf of North Ayrshire Council.
The company has also been appointed to the Highlands and Islands Enterprise Property Prime Contractors Framework, appointed an equity stakeholder in Hub South-West Scotland, which will deliver £400m of infrastructure investment over the next decade, and appointed to carry out £63m of schools work in north-east England by the Education Funding Agency.
The managing director of the Scotland and north-east England arm of Kier’s Construction business, Brian McQuade, said the division had “secured significant new contracts in Scotland” and had a strong order book and a healthy cash balance.
“The construction sector has shown increased buoyancy in recent months and this is reflected in our own business, where we have demonstrated sustainable growth this year,” he said.
The group went on to highlight a robust pipeline of work, with construction and service order books totalling £6.2bn and more than 90% secured and probable for next year.
Stock in the Bedfordshire-headquartered firm closed the day up 44p at 1,718p.
CEO Haydn Mursell was pleased to report “significant progress” and demonstrate the benefits of the acquisition of May Gurney.
“Despite inflationary price and labour challenges in the market, our margins remained robust,” he said.
“Following the integration of May Gurney, which transformed the scale and diversity of the group, the breadth of our capabilities has resulted in new, as well as larger contract awards.”