Slide 1: Kier Group plc preliminary results for the year ended 30 June 2009
Kier Group plc preliminary results for the year ended 30 June 2009 1
Slide 2: Preliminary Highlights
PRELIMINARY HIGHLIGHTS • Underlying pre-tax profits* at £52.8m (2008: £89.2m) • Underlying EPS* at 102.5p (2008: 174.8p) • Full year dividend maintained at 55.0p • £92.5m of net cash at 30 June 2009 (2008: £143.9m) • Secured and ‘probable’ order books for Construction at £2.2bn (2008: £2.1bn) repres
Slide 3: Revenue Headline Numbers
REVENUE HEADLINE NUMBERS YEAR TO 30 JUNE 2009 Construction (£1,492m) 2008 Construction (£1,585m) REVENUE Support Services (£438m) REVENUE Support Services (£394m) £m Partnership Homes (£151m) £m Partnership Homes (£311m) Developments (£65m) Developments (£84m) 3% 4% 7% 13% 20% 17% 70% 66% REVENUE 20
Slide 4: Underlying Pre-Tax Profit
UNDERLYING PRE-TAX PROFIT HEADLINE NUMBERS YEAR TO 30 JUNE 2009 Before Exceptional Including Before Change to exceptional items exceptional exceptional pre- items items items exceptional results 2009 2009 2009 2008 £m £m £m £m % Operating profit: Group 50.1 (22.0) 28.1 82.9 -39.6 Operating profit: j
Slide 5: Exceptional Items and Intangible Asset Amortisation
EXCEPTIONAL ITEMS AND INTANGIBLE HEADLINE NUMBERS ASSET AMORTISATION YEAR TO 30 JUNE 2009 2008 £m £m Credit from change in salary related pension benefits 24.3 - Partnership Homes reorganisation and restructuring costs (1.8) (9.5) Partnership Homes land write-downs (42.5) (26.6) Developments write-d
Slide 6: Operating Profit by Division
OPERATING PROFIT HEADLINE NUMBERS PERFORMANCE BY DIVISION YEAR TO 30 JUNE 2009 2008 £m £m % Construction 39.1 36.6 +6.8 Support Services 15.7 14.1 +11.3 Partnership Homes 1.1 32.2 -96.6 Developments (1.9) 11.7 - Corporate costs (2.9) (7.3) +60.3 Profit from operations* 51.1 87.3 -41.5 Finance income
Slide 7: Construction
CONSTRUCTION YEAR TO 30 JUNE 2009 2008 £m £m % Revenue 1,492.2 1,584.5 -5.8 Operating profit 39.1 36.6 +6.8 Operating margin 2.6% 2.3% - Order book (secure and probable) 2,245 2,114 +6.2 Cash 399.7 409.5 -2.4 REVENUE £m OPERATING PROFIT £m OPERATING MARGIN % Kier Group plc preliminary results for th
Slide 8: Support Services
SUPPORT SERVICES YEAR TO 30 JUNE 2009 2008 £m £m % Revenue 437.9 393.7 +11.2 Operating profit* 17.9 16.2 +10.5 Operating margin 4.1% 4.1% - Order book (secure) 2,292 2,023 +13.3 Cash 36.7 17.4 +110.9 * Before amortisation of intangible assets REVENUE £m OPERATING PROFIT £m OPERATING MARGIN % Kier Gr
Slide 9: Partnership Homes
HEADLINE NUMBERS PARTNERSHIP HOMES YEAR TO 30 JUNE 2009 2008 % Revenue £150.8m £311.5m -51.6 Unit sales 1,141 2,090 -45.4 Average selling price £132,200 £149,000 -11.3 Operating profit* £1.1m £32.2m -96.6 Operating margin 0.7% 10.3% - Overdraft £(264.9)m £(242.6)m -9.2 Net operating assets £339.6m £
Slide 10: Developments
HEADLINE NUMBERS DEVELOPMENTS YEAR TO 30 JUNE 2009 2008 £m £m % Revenue: Property 49.3 69.6 -29.2 PFI 15.4 14.9 +3.3 64.7 84.5 -23.4 Operating profit:* Property 0.8 12.0 - PFI (1.2) 0.3 - KAPS (1.5) (0.6) - (1.9) 11.7 - Overdraft (70.6) (24.9) - Net operating assets 85.2 58.6 +45.4 * Before exceptio
Slide 11: Group Balance Sheet
GROUP BALANCE HEADLINE SHEET NUMBERS AS AT 30 JUNE 2009 2008 Movement £m £m £m Intangible assets 11 13 (2) Property, plant and equipment 87 92 (5) Investment in joint ventures 34 40 (6) Inventories 424 516 (92) Other working capital (438) (548) 110 Cash 123 174 (51) Long-term borrowings (30) (30) -
Slide 12: Inventories
INVENTORIES HEADLINE NUMBERS AS AT 30 JUNE 2009 2008 Movement £m £m £m Residential land 230 276 -46 Residential work in progress 135 161 -26 Commercial land and work in progress 21 25 -4 Other work in progress 38 54 -16 Inventories 424 516 -92 Land commitments 27 56 -29 Kier Group plc preliminary re
Slide 13: Pensions: Balance Sheet Movement
PENSIONS: BALANCE SHEET MOVEMENT HEADLINE NUMBERS KIER GROUP PENSION SCHEME - 30 JUNE 2009 Pensions deficit £m Kier Group plc preliminary results for the year ended 30 June 2009 13
Slide 14: Cash
HEADLINE CASH NUMBERS YEAR TO 30 JUNE 2009 2008 Movement £m £m £m Construction 400 410 -10 Support Services 37 17 +20 Partnership Homes* (265) (243) -22 Developments* (71) (25) -46 Centre (8) (15) +7 Net cash 93 144 -51 * Partnership Homes: outflow of £22m arising from final payment for Hugh Bourn H
Slide 15: Construction Activities
CONSTRUCTION ACTIVITIES • Buildings and infrastructure projects in the UK, Middle East and Caribbean • Focussed on regional opportunities through Kier Regional network BDP offices • Framework agreements underpin our order books in building and Lexden Viaduct civil engineering • Relationships and rep
Slide 16: Construction Awards by Sector
CONSTRUCTION AWARDS BY SECTOR • Key frameworks: • Education: • Academies • BSF • Primary Capital Investment Programme • Healthcare: ProCure 21 • Custodial: National Offender Management Service • Retail: • Waitrose • Tesco • Sainsbury 56% public sector (2008: 49%) 44% private sector (2008: 51%) • Mor
Slide 17: Construction Achievements This Year
CONSTRUCTION ACHIEVEMENTS THIS YEAR • Review of structure and costs to drive out efficiencies – £10m annualised savings • Margin growth and good cash performance • New awards include: • Increase in number of frameworks to 52 • £600m of education projects (including BSF) • £100m power station for EDF
Slide 18: Construction Order Books – Secure and Probable
CONSTRUCTION ORDER BOOKS – SECURE AND PROBABLE Probable % Secure 100 75 Total order book 50 93% £2.2bn (2008: 25 50% £2.1bn) 0 2010 2011 Kier Group plc preliminary results for the year ended 30 June 2009 18
Slide 19: Construction Outlook
CONSTRUCTION OUTLOOK • Frameworks – 52 in total including public and private sector clients • Order books are strong, good visibility to 2011 • Cash generation continues • Energy and power sectors provide significant opportunity in power station investment • Group purchase into Kent BSF secures £300
Slide 20: Construction: Kier Winning Themes
CONSTRUCTION KIER WINNING THEMES • Wide geographic spread • Integration into local communities, client base and supply chain • Strong central co-ordination of national clients • Track record of performance delivery • Financial strength of Kier Group • Ability to manage smaller contracts • Strong saf
Slide 21: Support Services Activities
SUPPORT SERVICES ACTIVITIES • Building Maintenance: local authority housing maintenance contracts, ‘decent homes’ and housing Decent Homes association repairs and maintenance • Facilities Services: building management, maintenance and M&E design, installation and maintenance Cobham Fire Station • St
Slide 22: Support Services Revenue Analysis
SUPPORT SERVICES REVENUE ANALYSIS – YEAR TO 30 JUNE 2009 Building Maintenance (£329m) Facilities Services (£92m) 4% Plant (£30m) 6% Street Services (£20m) Note: revenue 20% analysis includes intra-group revenue of £33m 70% Kier Group plc preliminary results for the year ended 30 June 2009 22
Slide 23: Support Services Achievements This Year
SUPPORT SERVICES ACHIEVEMENTS THIS YEAR • Award of North Tyneside building maintenance contract – 16,000 units at £60m per annum for 10 years – extendable to 15 years • Award of Southwark building maintenance contract - £3m per annum for 7 years • Award of Sheffield outsourcing contract for non- res
Slide 24: Support Services Secured Forward Revenue
SUPPORT SERVICES SECURED FORWARD REVENUE – AS AT 30 JUNE 2009 Order book Preferred bidder/ 500 Short-listed 450 400 Total 350 order Workload £m 300 book 250 £2.3bn 200 150 (2008: 100 £2.0bn) 50 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Kier Group plc preliminary results for the year ended
Slide 25: Building Maintenance – Major Contracts
SUPPORT SERVICES BUILDING MAINTENANCE – MAJOR CONTRACTS CONTRACT DESCRIPTION ANNUAL DURATION EXPIRY REVENUE Sheffield City Repairs & maintenance and £100m 10 years April 2013 Council decent homes Islington City Repairs & maintenance and £45m 10 years October 2010 Council decent homes Stoke-on-Trent
Slide 26: Support Services Outlook
SUPPORT SERVICES OUTLOOK • Long list of contracts to bid including: • Birmingham - £25m pa, +5 years – repairs & maintenance • Nottingham - £25m pa to £62m pa, 4 years – planned maintenance and decent homes • LB Southwark - £25m pa, 5 years – planned maintenance • Good visibility of revenue and earn
Slide 27: Partnership Homes Activities
PARTNERSHIP HOMES ACTIVITIES • Social housing, private development and mixed tenure development with the capability to: Roke Lane • Deliver large scale regeneration projects • Respond to the challenges of local housing companies Midsummer, Cambourne • Participate in housing PFI schemes, and • Respon
Slide 28: Partnership Homes Unit Sales
PARTNERSHIP HOMES UNIT SALES – YEAR TO 30 JUNE 2009 Private sales Social sales (from owned land) Social sales (contracted) 31% 652 41% 467 48% 552 57% 1,173 12% 265 11% 122 2009 (1,141) 2008 (2,090) Kier Group plc preliminary results for the year ended 30 June 2009 28
Slide 29: Partnership Homes Land Bank
PARTNERSHIP HOMES LAND BANK – AS AT 30 JUNE 2009 • +60 sites spread PLOTS BY REGION across the UK Scotland Lincolnshire • 6,150 units in the land Anglia South bank with planning consent 25% 18% • Approximately half acquired over 2 years ago • Book value of land bank £230m • Average plot cost: £37,00
Slide 30: Partnership Homes Market Outlook
PARTNERSHIP HOMES MARKET OUTLOOK • Market beginning to stabilise, visitor levels and reservations are more consistent, lending increasing • Loan-to-salary ratios moving towards more sustainable levels • Lower stock availability is underpinning pricing levels and driving up the market selectively • G
Slide 31: Partnership Homes Future
PARTNERSHIP HOMES FUTURE • Focus on the delivery of affordable housing and regeneration • Skills to integrate mixed tenure regeneration and private development to maximise value of the land bank • Further reduction in land bank and work in progress • Future model: • Lower risk profile (less speculat
Slide 32: Partnership Homes Mixed Tenure Opportunities
PARTNERSHIP HOMES MIXED TENURE OPPORTUNITIES • Housing PFI’s: • Local housing • Woking one of two companies: bidders (324 new homes) • Sheffield provision of • Other opportunities: 2,500 mixed tenure • Birmingham homes • Hull • Nottingham • Portsmouth • Bolton • Northampton City • 6,150 plots of lan
Slide 33: Developments Activities
DEVELOPMENTS ACTIVITIES • Property: pre-let or pre-sold developments to keep risks at a low level. Joint ventures with Ordnance Survey corporates, such as Network Rail • PFI: investment in the private finance initiative Reading Central • KAPS: local authority outsourced property management Supreme C
Slide 34: Developments Achievements This Year
DEVELOPMENTS ACHIEVEMENTS THIS YEAR • Completion of UK Supreme Court, on time and within budget – now being sold for over £30m • Established Network Rail joint venture to develop station sites in the South East of England • Selection of preferred bidder on PFI Police Investigation Centres - £60m of
Slide 35: Developments Achievements This Year: Kent BSF and PFI
DEVELOPMENTS ACHIEVEMENTS THIS YEAR • Kent BSF acquisition (34 schools in total): • PFI – investment of £6.7m now plus a further £9.0m in future phases • Construction - £300m of additional schools work including £80m of PFI projects • FM contract - £80m over 25 years • Total PFI portfolio - £28m: •
Slide 36: Current Trading and Prospects
CURRENT TRADING AND PROSPECTS • 93% of targeted construction revenue for 2010 and 50% of targeted construction revenue for 2011 secure and probable • Frameworks and repeat business underpin our awards • Good revenue visibility for Support Services together with further outsourcing opportunities • Pa
Slide 37: Headline Numbers Appendix I
HEADLINE HEADLINE NUMBERS NUMBERS APPENDIX I YEAR TO 30 JUNE 2009 2008 % Revenue £2,146m £2,374m -9.6 Pre-tax profit* £53m £89m -40.4 Adjusted EPS* 102.5p 174.8p -41.4 Full year dividend 55.0p 55.0p - Net cash £93m £144m -35.4 Construction and Support Services order books (secure and probable) £4.5b
Slide 38: Kier Project Investment: Current Projects
KIER PROJECT INVESTMENT CURRENT PROJECTS APPENDIX II SECTOR PROJECT STATUS CAPTIAL KIER EQUITY/ EQUITY VALUE £M LOAN STOCK £M % Health West Berkshire Hospital Operational 25 1.8 50 Hinchingbrooke Operational 19 1.1 50 Ipswich Hospital Operational 27 1.3 50 Local Bournemouth Library Operational 14 0.
Slide 39: Kier Group plc preliminary results for the year ended 30 June 2009
Kier Group plc preliminary results for the year ended 30 June 2009 39