Kier Group reported its first average net cash position in over a decade for fiscal year 2026, posting £11m compared with an average net debt of £49m a year earlier, as infrastructure growth propelled a strong turnaround.
Revenue for the year ended June 30 rose 7.5% to £4.4 billion, driven primarily by a 10% gain in its infrastructure division, which delivered £2.34 billion in revenue and £129 million in adjusted operating profit, with margins expanding 30 basis points to 5.5%.
Adjusted operating profit for the group rose 6.7% to £170 million on an operating margin of 3.9%, while adjusted earnings per share climbed 8.8% to 23.5p. Operating free cash flow reached £206 million with a 121% conversion rate, and closing net cash stood at £232 million, up from £204 million in June 2025.
"I am delighted to announce that for the full year we achieved an average net cash position of £11 million. It is a significant milestone for the group," Chief Financial Officer Tom Hinton said.
The order book expanded 8.2% to a record £11.9 billion as of June 30, giving the company roughly 95% of FY27 revenue visibility, 70% for FY28, and early 50% range coverage for FY29. Public and private sector framework positions totaled approximately £200 billion across 120 frameworks, up from £150 billion previously.
Kier outlined ambitious targets across its growth sectors by FY29, including water revenue above £800 million annually, up from more than £400 million in FY26. The water business serves 10 of 12 water companies in England and Wales and has frameworks totalling £13 billion backed by the £104 billion AMP 8 programme. Energy revenue is targeted above £400 million, up from £170 million, supported by roles in Sizewell C's nuclear programme and frameworks worth £3 billion. Defence revenue should exceed £350 million, up from £160 million, and healthcare revenue more than £250 million, up from roughly £170 million.
Combined annual revenue from these growth sectors is set to approach £1.8 billion by FY29, compared with approximately £900 million in FY26.
The property division saw revenue surge 65% to £63 million, though adjusted operating profit fell 25% to £9 million and return on capital employed dropped to 4.3%, down 240 basis points. Kier announced a phased exit from property development with no new investments, targeting about £150 million in cash proceeds by FY29.
Management set a balance sheet target of more than £200 million in average net cash by fiscal 2029. Allocatable capital for FY27 through FY29 is expected to total £600 million to £700 million, supporting continued dividends and buybacks.
Kier's dividend rose 8.3% to 7.8p per share, maintaining a 3x earnings cover, and share buybacks totalled £25 million. The company's share price rose approximately 4.1% after the results, trading near its 52-week high. Both S&P and Fitch rate Kier at BB+.
