Kier says results justify May Gurney bid

Kier says its latest interim results show that its decision to take over May Gurney in June last year was fully justified.

In the six months to the end of last year, the company saw underlying pre-tax profits jump by 90% to £36.8m, while group revenue jumped by £400m to £1.4bn.

The underlying profit figure, however, does not include a £22m exceptional charge the company is making in this period to cover the ongoing costs of the acquisition, which was hotly contested between Kier and Costain.

Net debt has also increased to £138m from £60m the year before following the acquisition.

Chief executive Paul Sheffield, who is due to stand down at the end of June, said: “The acquisition has consolidated the group’s position in support services, providing a range of complementary services to clients in the highways, transport and utilities sectors. The integration remains on course, with good customer retention, new extended contracts and revenue synergies. We are on track to deliver the anticipated £5m cost savings in this financial year.”

He said the company was continuing to see signs of economic recovery. In the reporting period it has also managed to increase its margin in is construction business to 2.3% compared with 2.1% in the same period the year before, although services margins have remained level at 4.3%.

The dividend was increased by 5% to 22.5p.

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