Kier raises margin target as orders grow

Tier one contractor Kier has raised its margin targets amid an increase in orders.

In a London Stock Exchange announcement this morning (3 June) before its capital markets event with investors, the £3.9bn-turnover firm said that trading for the first four months of the year “remains in line with expectations”.

Kier said its order book stood at £11bn by the end of April – up 2 per cent on the £10.8bn it reported at the end of its previous financial year to 30 June 2024.

“Long-term framework positions are excluded from the order book and represent an additional opportunity,” it added.

Kier said it had already secured approximately 80 per cent of its forecast revenue for its 2026 financial year.

It added that its operating model was driving “above market growth” and delivering “sector-leading margins”.

As a result, the contractor has upgraded its operating profit margin target to between 4-4.5 per cent over the next three to five years.

It cited the recapitalisation of its property division and “risk management embedded across operations” in its trading update.

Kier was the third-largest contractor by turnover in the most recent CN100 table, behind only Balfour Beatty and Morgan Sindall, based on its financial results for the year to 30 June 2024.

To date this calendar year, contract wins include a place on a £400m five-year framework renewal with Anglian Water as part of the IOS Alliance alongside Morrison Utility Services and Barhale.

In the trading update, Kier also mentioned a highways maintenance extension deal from Shropshire County Council, and a preconstruction services agreement from the University of Warwick for a new STEM facility.

The contractor said it also secured two education projects with a combined value of about £180m, including a deal to redevelop East Coast College’s Great Yarmouth campus.

Elsewhere, the firm noted that its development joint venture with Network Rail had obtained planning permission for a £200m mixed-use scheme near Bishop’s Stortford railway station in Hertfordshire.