(Sharecast News) – Infrastructure and construction services specialist Kier Group reported a 4.6% improvement in revenue in its full-year results on Thursday, hitting £3.41bn and an adjusted operating profit of £131.5m, making for a 9.1% increase.
The London-listed firm said its adjusted operating margin stood at 3.9%, showing an uptick of 20 basis points and surpassing its medium-term target of roughly 3.5%.
Its adjusted profit before tax demonstrated growth of 11.4%, reaching £104.8m, while the adjusted basic earnings per share rose 14.3% to 19.2p.
Despite the economic challenges of ongoing inflationary pressures, Kier said it achieved a solid financial performance in 2023.
Its board said a pivotal performance element was revenue growth, propelled by the company’s consistent operational delivery.
Compared to 2022’s £120.5m, the adjusted operating profit for 2023 came in at £131.5m, while basic earnings per share increased from 16.8p to 19.2p, reflecting a 14.3% increment.
Reported profit from operations soared 80.7%, reaching £81.5m.
A notable achievement was net cash of £64.1m, marking a 2,110.3% increase from 2022’s £2.9m.
That, Kier said, was accomplished after the full repayment of £49.8m KEPS.
The average month-end net debt stood at £232.1m, which was 7.4% wider than in the prior year, while the company’s free cash flow was £132.3m, backed by an operating cash conversion of 129.7% in the fourth quarter.
In light of the group’s encouraging results, Kier said it intended to restart dividend payments in 2024, beginning with an interim dividend.
“The group has achieved considerable operational and financial progress over the last two years,” said chief executive officer Andrew Davies.
“This is reflected in the significantly improved financial performance of the Group over the last year.
“It is testament to the hard work and commitment of our people who have enhanced our resilience and strengthened our financial position in line with the objectives set out in our medium-term value creation plan.”
Davies said the firm’s order book remained strong at £10.1bn, providing good multi-year revenue visibility.
“The contracts within our order book reflect the bidding discipline and risk management now embedded in the business.
“I am also particularly pleased to report, the group significantly improved its year-end net cash position and has confidence in sustaining this momentum going forward.”
Andrew Davies added that the new financial year had started well, with Kier trading in line with expectations.
“The group is well positioned to continue benefiting from UK Government infrastructure spending commitments, and we are confident in sustaining the strong cash generation evidenced this year.
“This, combined with our focus on operational delivery, gives the group a clear line-of-sight to significantly de-lever.
“As a result, the group intends to resume dividend payments during the 2024 financial year, with the first dividend to be declared alongside our interim results.”
At 1025 BST, shares in Kier Group were up 6.2% at 92.39p.
Reporting by Josh White for Sharecast.com.