Slide 1: Interim results presentation for the six months to 31 December 2007
Interim results presentation for the Integrated excellence six months to 31 December 2007 Individual flair 27 February 2008
Slide 2: Interim highlights
Interim highlights Pre-tax profits up 23.2% to £44.6m (2006: £36.2m) EPS* up 19.1% to 90.3p (2006: 75.8p) Dividend increased by 87.5% to 18.0p (2006: 9.6p) Net cash of £135.9m (2006: £114.4m) Strong Construction and Support Services order books Homes order book plus completions to 1 Febr
Slide 3: EPS record
EPS record since 1996 (after flotation) 1st Half 2nd Half UK GAAP IFRS Compound growth 160 140 in EPS of 23% per 120 annum since flotation 100 80 60 40 20 Record shown after deducting amortisation of intangible assets 0 and before exceptional profits 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Slide 4: Financial summary
Financial summary consolidated income statement Six months to 31 December Year to 30 June 2007 2006 Change 2007 £m £m % £m Revenue 1,205.5 1,020.5 +18.1 2,127.9 Operating profit: Group 41.9 34.5 +21.4 74.9 Operating profit: joint ventures 2.8 4.4 -36.4 7.3 Group and share of joint ventures 44.7 38.9
Slide 5: Financial summary continued
Financial summary continued Six months to 31 December Year to 30 June 2007 2006 Change 2007 % Dividend per share 18.0p 9.6p +87.5 50.0p Dividend cover 4.9x 7.7x - 3.1x Adjusted earnings per share excluding amortisation of intangibles: undiluted 90.3p 75.8p +19.1 158.9p fully diluted 89.8p 74.8p +20.
Slide 6: Performance by segment
Performance by segment Six months to 31 December Year to 30 June 2007 2006 Change 2007 £m £m % £m Revenue: Construction 816.1 675.2 +20.9 1,411.2 Support Services 179.3 142.7 +25.6 315.5 Homes 143.2 151.8 -5.7 325.1 Property 58.3 43.5 +34.0 61.3 Infrastructure Investment 8.6 7.3 +17.8 14.8 1,205.5 1
Slide 7: Segmental analysis: revenue and profit before tax by division
Segmental analysis revenue and profit before tax by division (six months to 31 December 2007) Revenue Profit before tax Construction Support Services Homes 5% 1% 11% 1% Property PFI 12% 15% 25% 50% 67% 13% Kier Group plc interim results for the six months to 31 December 2007 7
Slide 8: Segmental analysis: net operating assets
Segmental analysis net operating assets At 31 December At 30 June 2007 2006 Change 2007 £m £m £m £m Construction (291.5) (241.0) -50.5 (277.8) Support Services (2.9) (6.1) +3.2 (1.4) Homes 353.4 286.7 +66.7 295.5 Property 47.7 42.7 +5.0 57.4 Infrastructure Investment 2.0 (0.6) +2.6 10.5 Centre (64.7
Slide 9: Balance sheet
Balance sheet summary At 31 December At 30 June 2007 2006 Change 2007 £m £m £m £m Intangible assets 12.6 13.8 -1.2 13.6 Property, plant and equipment 84.6 80.3 +4.3 83.4 Investments in joint ventures 32.2 28.0 +4.2 40.7 Inventories 482.9 443.3 +39.6 460.1 Other working capital (499.7) (474.8) -24.9
Slide 10: Pensions
Pensions IAS 19 At 31 December At 30 June Dec 2007-June 2007 2007 2006 2007 Change £m £m £m £m Kier Group Pension Scheme: Market value of assets 535.3 514.6 506.7 +28.6 Present value of liabilities (576.1) (562.7) (537.3) -38.8 Deficit in the scheme (40.8) (48.1) (30.6) -10.2 Deferred tax asset 11.5
Slide 11: Movement in cash balances
Movement in cash balances summary for the six months to 31 December 2007 £m Opening net funds at 30 June 2007 148.4 Cash inflow from operating activities 26.7 Deferred payment for Hugh Bourn Homes (12.9) Investment in joint ventures (1.2) Net capital expenditure (9.9) Financing, tax and dividends (1
Slide 12: Group structure
Group structure (revenue figures for the six months to 31 December 2007) Revenue Revenue Revenue Revenue Revenue £816.2m £179.3m £143.2m £58.3m £8.6m Kier Group plc interim results for the six months to 31 December 2007 12
Slide 13: Construction: key performance indicators
Construction key performance indicators Operating profit £m Operating margin % Six months to 31 December Year to 30 June 25 2 2007 2006 2007 £m £m £m Revenue 816.1 675.2 1,411.2 20 1.5 15 Operating 1 margin (%) 1.8% 1.4% 1.6% 10 Cash at period 0.5 end 378.9 322.4 361.2 5 Order book 1,616 1,470 1,710
Slide 14: Regional
Kier Regional Regional contracting, major building projects, affordable housing Kier Regional Six months to 31 December Year to 30 June office locations 2007 2006 2007 Public sector awards 50% 49% 45% Private sector awards 50% 51% 55% 100% 100% 100% Negotiated and two- stage bids 80% 65% 64% Competi
Slide 15: Regional: revenue vs average cash 2000 to 2008
Kier Regional revenue vs average cash 2000 to 2008 1400 350 1200 300 Construction revenue (£m) 1000 250 Average cash (£m) 800 200 600 150 400 100 200 50 0 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 Revenue (rolling 12 months) Average cash (rolling 12 months) Kier Group plc interim results for th
Slide 16: Regional: key markets and opportunities
Kier Regional key markets and opportunities Commercial property: % awards in six months by sector Kier Property projects Commercial Prisons SEGRO projects Education Retail Ballymore Properties Residential Health Education: Hotels & Leisure Other Academies national framework 3% 7% Kent
Slide 17: Construction: UK civil engineering, mining and overseas
Kier Construction UK civil engineering, mining and overseas UK: Overseas: South Hook LNG offshore Romania: works nearly complete Housing and retail construction projects CCGT power stations progress well – more energy projects Middle East: under negotiation Infrastructure and drainag
Slide 18: Support Services: key performance indicators
Kier Support Services key performance indicators Operating profit £m* Operating margin %* Six months to 31 December Year to 30 June 14 4.5 2007 2006 2007 £m £m £m 4 12 10 3.5 Operating 3 margin (%)* 4.0% 3.5% 3.9% 8 Cash 18.9 17.8 15.8 2.5 6 2 Order book: 1.5 4 1 Building 2 0.5 Maintenance 1,088 988
Slide 19: Support Services: four business streams
Kier Support Services four business streams Building Maintenance: Revenue Six months to 31 December 2007 2006 Year to 30 June 2007 £m £m £m Local authority and housing Building association maintenance Maintenance 134.3 99.0 228.3 contracts, Decent Homes and Managed Services 25.0 24.8 52.1 Street
Slide 20: Support Services: office locations
Kier Support Services office locations Building Maintenance Stoke awarded February 2008: 20,000 homes 500 workers transferred £40m p.a. for 10 years (plus 5) Repairs, maintenance and Decent Homes Shortlisted: North Tyneside: £60m p.a. for 10 years Camden: £10m p.a. for 5 years Grow
Slide 21: Building Maintenance: forward revenue
Kier Support Services Building Maintenance: forward revenue 350,000 300,000 250,000 Revenue (£m) 200,000 150,000 100,000 50,000 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Maintenance Decent Homes Preferred Bidder Shortlisted Kier Group plc interim results for the six months to 31
Slide 22: Residential: key performance indicators
Kier Residential key performance indicators Operating profit £m Operating margin % 50 17 Six months to 31 December Year to 30 June 45 2007 2006 2007 15 40 13 Unit sales (units) 827 819 1,767 35 30 11 Av. selling price £ 173,200 175,200 179,300 25 9 Revenue: 20 7 Housing £m 143.2 143.5 316.8 15 Land
Slide 23: Residential: completions, average sales price and plot cost
Kier Residential completions, average sales price and plot cost Six months to 31 December 2007 2007 2006 2006 Units ASP (£) Units ASP (£) Allison Homes 138 175,900 244 145,300 Bellwinch Homes 195 174,400 160 173,400 Kier Homes Scotland 159 190,800 133 205,600 Kier Homes Northern 114 144,200 54 150,0
Slide 24: Residential map: location of land bank
Kier Residential map location of land bank Selective land purchases largely in Scotland in the period Order book at 1 February 20% less than last year but new sites opening in the second half Completions to date plus order book secure 75% of full year target Long-term market fundamentals are
Slide 25: Property: key performance indicators
Kier Property key performance indicators Operating profit £m Six months to 31 December Year to 30 June 14 2007 2006 2007 £m £m £m 12 10 Operating profit: 8 Kier 6.5 5.6 6.9 Joint venture 1.0 3.6 5.2 6 7.5 9.2 12.1 4 2 0 27 schemes Gross Floor 2004 2005 2006 2007 2008 development space 1st half 2nd h
Slide 26: Property: recent developments
Kier Property recent developments Good progress on Supreme Kier Property Supreme Court Court with Wallis as contractor Sale of Milton Keynes development pre-let to Electronic Data Systems – Kier Regional as contractor Sale of 22-unit Trade City industrial site at Hemel Hempstead Development
Slide 27: Regeneration
Kier Regeneration GQ2 Gateshead: mixed Kier Property GQ2, Gateshead development of 4.5 acre riverside site – retail, offices, hotel, leisure and residential Ashford: redevelopment of former rail land including residential, retail and affordable housing Kier Rail/Kier Regional/ Poole: redevelop
Slide 28: Project Investment
Kier Project Investment Hairmyres: Sale of Hairmyres in February 2008 for £13.8m cash Profit of £16.2m to be recognised in the second half of the year Implies a discount rate of less Kier Project Investment than 5% Hinchingbrook Hospital treatment centre New markets: Including fire stati
Slide 29: Project Investment: current projects
Kier Project Investment current projects Sector Project Status Capital Kier equity/ Equity % value £m Loan stock £m Health Hairmyres Hospital Sold February 2008 68 4.3 50 West Berkshire Hospital Operational 25 1.6 50 Hinchingbrooke Operational 19 1.1 50 Ipswich Hospital Construction 27 1.5 50 Local
Slide 30: Markets and prospects
Markets and prospects Little sign of credit crunch affecting Construction and Support Services Continued Government spending on education, prisons and health Regeneration and affordable housing opportunities in response to Government commitments Strong order books and high levels of enquiry
Slide 31: Five-year record
Five-year record year ended 30 June IFRS UK GAAP 2007 2006 2005 2004 2003 £m £m £m £m £m Turnover 2,127.9 1,838.3 1,623.2 1,476.5 1,445.6 Operating profit (Group + JVs) 82.2 63.2 53.3 42.6 36.2 Total finance cost net (3.2) (2.7) (4.3) (2.0) (0.6) Joint venture tax (1.4) (1.4) (1.2) - - Other: except