Huge profits surge at Kier

A MOUNTAIN of Government money to build new social housing, schools and hospitals sent profits soaring at construction company Kier last year and the company said there was more to come thanks to a bulging order book.

The Bedfordshire-based company produced pre-tax profits of £25.6m, up 57% on 2003, on the back of a 12.4% rise in turnover. Chief executive John Dodds said he was extremely confident about prospects, adding: 'There is great potential for further growth in this business.'

Prospects are seen as particularly strong in the company's construction operation. Kier is working on delivering more affordable housing, a key Government priority area.

Kier reported a year-end order book worth £600m, which is the same size as it was at the end of the previous year. But since the end of the year the company has taken on several massive new deals, worth another £285m in all. The new contracts give Kier a forward order book of £723m at the end of February. One of the new deals signed in the past few weeks includes a major structure maintenance framework deal for Network Rail in East Anglia.

Kier benefited last year from a £5.9m one-off gain from sales of property and a share in its investment in Neath Port Talbot hospital. Turnover rose to £816m.

Housing completions in Kier Residential, meanwhile, rose from 562 in 2003 to 721 last year, with affordable housing sales rising from 35 to 105. This pushed up divisional turnover 29.5% to £134.5m. Operating margins rose to 14.7% from 12.4%. Kier said it is now focusing on more brownfield housing development. Visitor levels since early January have picked up from the autumn.

Shareholders get a full-year dividend of 7p, up 1p or 16.7% on last year's payout.