Slide 1: Kier Group plc Preliminary results presentation
Kier Group plc Preliminary results presentation 15 September 2005
Slide 2: Highlights
Highlights • Pre-tax profits, including exceptional profits of £6.7m, up 39.8% to £60.4m* • EPS, before exceptional items up 20.9% to 105.4p* • Dividend per share up 16.8% to 22.2p • Cash inflow from operating activities £86.4m • Construction and Support Services order books at record levels • The H
Slide 3: EPS record since 1996 (flotation)
EPS record: since 1996 (flotation) 100 • 13th year of 90 continuous 80 growth 70 • Compound 60 growth in EPS of 23% per pence 50 annum since 40 flotation 30 (excluding 20 goodwill) 10 • Return on 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 shareholders’ years funds of c40% per annum for Record sh
Slide 4: Financial summary
Financial summary Year to 30 June 2005 2004 Change £m £m % Total turnover 1,621.4 1,476.5 +9.8 Operating profit including share of joint ventures* 53.4 42.6 +25.4 Net interest receivable/(payable) - Group 0.9 (0.2) - Net interest payable – joint ventures (3.1) (1.8) -72.2 Profit before tax and excep
Slide 5: Financial summary (continued)
Financial summary (continued) Year to 30 June 2005 2004 Change £m £m % Dividends per share 22.2p 19.0p +16.8 Dividend cover (EPS before exceptionals) 4.5x 4.3x - Basic earnings per share: undiluted 106.8p 81.5p +31.0 fully diluted 105.9p 80.8p +31.1 Adjusted earnings per share (before exceptional pr
Slide 6: Exceptional items
Exceptional items Year to 30 June 2005 Profit before tax Tax Net profit £m £m £m Disposal of investment in Kier Hong Kong 0.8 - 0.8 Disposal of investment in PFI concession: (Neath Port Talbot Hospital) 2.1 (0.6) 1.5 Refinancing of a PFI joint venture: (Hairmyres Hospital) - (2.5) (2.5) Disposal of
Slide 7: Performance by segment
Performance by segment Year to 30 June 2005 2004 Change £m £m % Turnover: Construction 1,096.2 1,007.3 +8.8 Support Services 227.5 197.7 +15.1 Homes 225.5 215.7 +4.5 Property 60.4 46.6 +29.6 Infrastructure Investment 11.8 9.2 +28.3 1,621.4 1,476.5 +9.8 Operating profit: Construction 1 15.0 10.9 +37.
Slide 8: Segmental analysis: net operating assets
Segmental analysis: net operating assets At 30 June 2005 2004 Change £m £m £m Construction (175.1) (132.6) -42.5 Support Services (6.3) 10.6 -16.9 Homes 248.4 201.3 +47.1 Property 24.3 24.8 -0.5 Infrastructure Investment (1.7) 9.0 -10.7 Centre (0.3) (4.3) +4.0 89.3 108.8 -19.5 Cash, net of debt 58.1
Slide 9: Cash flow: summary for the year to June 2005
Cash flow: summary for the year to 30 June 2005 £m Opening net funds at 30 June 2004 7.6 Cash inflow from operating activities 98.4 Less: Additional contribution to pension fund (12.0) • Good cash 86.4 generation from Cash inflow: Construction • Cash generation Refinancing Hairmyres 8.1 from Mining
Slide 10: Pensions: FRS 17
Pensions: FRS 17 At 30 June 2005 2004 Change £m £m £m Market value of assets 393.9 325.8 +68.1 Present value of liabilities (511.9) (421.8) -90.1 Deficit (118.0) (96.0) -22.0 Deferred tax asset 35.4 28.8 +6.6 Net pension liability (82.6) (67.2) -15.4 • 0.9% reduction in discount rate • 0.5% reductio
Slide 11: Pensions: actions
Pensions: actions • Proceeds from refinancing and PFI investment sale applied towards a £12.0m additional contribution - no impact on operating profits for the year • Changes to the way in which contributions are made result in cost savings which are being applied as additional contributions to the
Slide 12: International Accounting Standards: key changes in accounting policy
International Accounting Standards: key changes in accounting policy • Pension scheme deficit included in the balance sheet IAS 19 • Sales and marketing costs written off as incurred IAS 2 • Recognition of imputed interest on deferred land payments IAS 2 • Development property profit recognition on
Slide 13: International Accounting Standards: reconciliation
International Accounting Standards: reconciliation 30 June 2005 PBT Net assets £m £m UK GAAP 57.9 147.4 Retirement benefits 0.1 (93.7) Sales and marketing costs (1.8) (3.9) Deferred land payments (1.6) (1.1) Property transactions 0.5 - Goodwill 0.6 0.6 Deferred taxation - (2.0) Share-based payments
Slide 14: Kier Group operating structure
Kier Group operating structure Kier Group plc preliminary results for the year ended 30 June 2005 14
Slide 15: Construction: performance
Construction: performance Year to 30 June 2005 2004 Turnover £1,096.2m £1,007.3m Operating margin* 1.4% 1.1% Cash at 30 June £241.7m £191.6m Order book at 30 June £1,030m £662m * Before goodwill amortisation Kier Group plc preliminary results for the year ended 30 June 2005 15
Slide 16: Kier Regional: Cash & Interest Bearing Funds
Kier Regional: Cash & Interest Bearing Funds £'M 250 225 200 175 150 125 100 75 Jun 98 Dec 98 Jun 99 Dec 99 Jun 00 Dec 00 Jun 01 Dec 01 Jun 02 Dec 02 Jun 03 Dec 03 Jun 04 Dec 04 Jun 05 Kier Group plc preliminary results for the year ended 30 June 2005 16
Slide 17: Kier Regional: Contracting, Building, Major Projects, Affordable Housing
Kier Regional: Regional Contracting, Building Major Projects, Affordable Housing Year to 30 June 2005 2004 Contract awards £1,018m £845m Public sector awards 41% 36% Private sector awards 59% 64% 100% 100% Negotiated and two-stage bids 59% 52% Competitive tender 41% 48% 100% 100% Kier Group plc prel
Slide 18: Kier Regional: local builder with national coverage
Kier Regional: local builder with national coverage • Average contract size £2.6m • National frameworks and alliances: • Kier Health: ProCure 21 projects • Kier Retail: Tesco, Pillar, Waitrose, Morrison • Kier Custodial: HM Prisons framework • Kier Education: Building Schools for the Future • Local
Slide 19: Construction: Infrastructure & Overseas
Kier Construction: Infrastructure & Overseas • UK civil engineering • Network Rail structures framework contract for East Anglia - £100m over five years • Second five-year framework agreement for United Utilities in joint venture - £130m to Kier • Overseas • Caribbean activities include new Sandals
Slide 20: Construction: Mining
Kier Construction • Mining • Greenburn performing well • 750,000 tonnes transported from the site • 60% of future sales forward sold at favourable prices • Further opportunities are being explored to extend the mine Kier Group plc preliminary results for the year ended 30 June 2005 20
Slide 21: Support Services: performance
Kier Support Services: performance Year to 30 June 2005 2004 Turnover £227.5m £197.7m Operating margin* 2.2% 2.3% Order book £1,204m £1,090m Cash £14.4m £(3.3m) *before goodwill amortisation Kier Group plc preliminary results for the year ended 30 June 2005 21
Slide 22: Support Services: Building Maintenance
Kier Support Services: Building Maintenance • Operations: • Core works: • Reactive and planned maintenance • Decent Homes: • Upgrade of kitchens and bathrooms • Projects: • Construction contracts, up to £5.0m • Manufacturing: • uPVC windows and kitchen units Kier Group plc preliminary results for th
Slide 23: Support Services: Managed Services
Kier Support Services: Managed Services • Operations: • Facilities management • Street services and grounds maintenance • Reactive maintenance • PFI and lifecycle Kier Group plc preliminary results for the year ended 30 June 2005 23
Slide 24: Kier Residential: performance
Kier Residential: performance Year to 30 June 2005 2004 Change % Unit sales (units) 1,215 1,158 +4.9 Average selling price (£) 181,700 186,300 -2.5 Turnover (£m) 225.5 215.7 +4.5 Land sale (£m) (4.7) - - Turnover from housing (£m) 220.8 215.7 +2.4 Operating profit (£m) 34.1 31.8 +7.2 Operating margi
Slide 25: Residential: completions, average sales price and plot cost
Kier Residential: completions, average sales price and plot cost Year to 30 June 2005 2005 2004 2004 Units ASP (£) Units ASP (£) Allison Homes 394 165,000 318 171,500 Bellwinch Homes 259 204,500 256 188,000 Kier Homes 185 178,300 198 176,600 Twigden Homes 377 185,200 386 202,400 1,215 181,700 1,158
Slide 26: Strategic Land
Strategic Land • Mixed-use schemes: • Kier Group companies are working together to deliver complex mixed-use schemes • Regeneration: • Kier Regeneration supported by a strong regional construction network offering unique ‘one-stop- shop’ service to clients • Strategic Land: • Planning achieved for 5
Slide 27: Kier Property
Kier Property Year to 30 June 2005 2004 £m £m Operating profit: Kier 5.6 4.4 Joint venture 4.4 2.2 10.0 6.6 25 Schemes Gross Floor space development value 7 office schemes £300m 1.0m sq ft 14 industrial schemes £270m 2.0m sq ft 4 retail schemes £113m 0.3m sq ft Over 1,000 residential units 1.0m sq f
Slide 28: Property: schemes
Kier Property: schemes • Office developments: • Whitehall for DEFRA • Swindon for National Trust • Frimley for subsidiary of BAe • Industrial developments (Trade City): • Enfield • Bicester • Exeter • Romford • Brooklands, Weybridge • Retail schemes: • Swindon – Mannington Retail park Kier Group plc
Slide 29: Mixed-use schemes
Mixed-use schemes: Kier Property, Kier Residential, Kier Regional • Waltham Park and Waltham Point: • 35 acres Residential • 48 acres Commercial • Now completed • Shippams Factory, Chichester: Before development • Planning for 165 flats • 50,000sq ft of retail • Ashford: • 700 flats • 100,000sq ft c
Slide 30: Kier Project Investment
Kier Project Investment • Financial close: • Sheffield Schools • Preferred bidder: • Garrett Anderson Centre, Ipswich Hospital • Norfolk Schools • Short-listed: • Sheffield BSF • Oldham Schools • Refinanced Hairmyres Hospital • Sold investment in Neath Port Talbot Hospital Kier Group plc preliminary
Slide 31: Infrastructure Investment: current projects
Infrastructure Investment: current projects Sector Project Status Capital Kier equity/ Equity % value £m loan stock £m Health Hairmyres Hospital Operational 68 4.3 50 West Berkshire Hospital Operational 25 1.8 50 Hinchingbrooke Operational 19 1.1 50 Ipswich Hospital Preferred bidder 26 1.6 50 Local
Slide 32: Prospects
Prospects • Order books for Construction and Support Services are at record levels • Homes order book marginally ahead of last year but market still uncertain • Property Development – good pipeline of developments • PFI – success continues • Value from mixed-use developments combining skills from al
Slide 33: Kier Group plc Preliminary results presentation
Kier Group plc Preliminary results presentation 15 September 2005