Kier Group Plc · LSE:KIE
Kier — H1 2006 Earnings Presentation
29 slides from Kier's earnings presentation, Mar 16, 2006
Slide 1: Interim results for the six months to 31 December 2005
Kier Group plc Interim results for the six months to 31 December 2005 16 March 2006 Building confidence
Slide 2: Interim highlights
Interim highlights • Pre-tax profits before exceptionals up 19.8% to £28.4m (2004: £23.7m) • EPS before exceptionals up 22.6% to 58.0p (2004: 47.3p) • Dividend increased by 17.1% to 8.2p (2004: 7.0p) • £39.4m of cash generated from operating activities • Construction and Support Services order books
Slide 3: EPS record: since 1996 (after flotation)
EPS record: since 1996 (after flotation) 1st Half 2nd Half UK GAAP IFRS 100 • Into 14th year of 90 continuous growth 80 since buyout 70 • Compound growth in 60 EPS of 23% per 50 annum since flotation 40 30 20 10 0 97 98 99 00 01 02 03 04 05 06 19 19 19 20 20 20 20 20 20 20 Earnings per share (pence)
Slide 4: Financial summary: consolidated income statement
Financial summary: consolidated income statement Six months to 31 December Year to 30 June 2005 2004 Change 2005 £m £m % £m Revenue 922.6 805.6 +14.5 1,623.2 Operating profit - Group 27.3 24.6 +11.0 48.1 Operating profit - joint ventures 3.4 1.9 +78.9 5.2 Group and share of joint ventures 30.7 26.5
Slide 5: Financial summary (continued)
Financial summary: (continued) Six months to 31 December Year to 30 June 2005 2004 Change 2005 % Dividend per share 8.2p 7.0p +17.1 22.2p Dividend cover 7.1x 7.4x - 4.5x Underlying earnings per share excluding exceptional items - undiluted 58.0p 47.3p +22.6 96.6p - fully diluted 57.5p 47.0p +22.3 95
Slide 6: Performance by segment
Performance by segment Six months to 31 December Year to 30 June 2005 2004 Change 2005 £m £m % £m Revenue: Construction 603.7 524.5 +15.1 1,086.3 Support Services 139.1 113.9 +22.1 237.4 Homes 134.8 134.5 +0.2 225.5 Property 38.3 27.2 +40.8 62.2 Infrastructure Investment 6.7 5.5 +21.8 11.8 922.6 805
Slide 7: Segmental analysis: net operating assets
Segmental analysis: net operating assets At 31 December At 30 June 2005 2004 Change 2005 £m £m £m £m Construction (200.4) (170.3) -30.1 (186.1) Support Services 1.2 19.6 -18.4 11.1 Homes 253.8 220.1 +33.7 245.6 Property 33.7 13.2 +20.5 24.4 Infrastructure Investment (5.7) (6.4) +0.7 (1.7) Centre (11
Slide 8: Balance sheet: summary
Balance sheet: summary At 31 December At 30 June 2005 2004 Change 2005 £m £m £m £m Intangible assets 15.7 17.6 -1.9 16.7 Property, plant and equipment 71.8 69.8 +2.0 75.8 Investment in joint ventures 17.4 20.8 -3.4 22.9 Inventories 369.1 296.8 +72.3 325.7 Other working capital (383.3) (314.6) -68.7
Slide 9: Pensions
Pensions: IAS 19 At 31 December At 30 June 2005 2005 Change £m £m £m Kier Group Pension Scheme: Market value of assets 440.8 393.5 +47.3 Present value of liabilities (578.3) (517.2) -61.1 Deficit in the scheme (137.5) (123.7) -13.8 Deferred tax asset 41.3 37.1 +4.2 Net pension liability (96.2) (86.6
Slide 10: Reconciliation of IFRS to UK GAAP
Reconciliation of IFRS to UK GAAP For the six months to 31 December 2005 At 31 December 2005 Profit before tax Net assets £m £m IFRS 28.4 55.4 Retirement benefits 0.1 101.4 Sales and marketing costs (0.1) 3.8 Deferred land payments 0.8 1.6 Goodwill (0.3) (0.9) Deferred taxation - 1.9 Share-based pay
Slide 11: Group structure
Group structure: (revenue figures for the six months to 31 December 2005) Construction Support Services Homes Property Infrastructure Investment Regional Contracting Kier Support Kier Residential Kier Property Kier Project Mid-range construction Services High quality private Commercial Investment pr
Slide 12: Construction: performance
Construction: performance Construction Six months to 31 December 2005 2004 Revenue £603.7m £524.5m Operating margin 1.4% 1.1% Regional Contracting Cash at 31 December £278.3m £237.0m Mid-range construction projects delivered by locally managed Order book at 31 December £1,030m £600m business units a
Slide 13: Kier Regional
Kier Regional: Regional Contracting, Building Major Projects, Affordable Housing Six months to 31 December 2005 2004 Contract awards for six months £493m £391m Public sector awards 50% 37% Private sector awards 50% 63% 100% 100% Negotiated and two-stage bids 59% 57% Competitive tender 41% 43% 100% 1
Slide 14: Kier Regional: local builder with national coverage
Kier Regional: local builder with national coverage • Average contract size £2.7m • 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 15: Construction: UK civil engineering, mining & overseas
Kier Construction: UK civil engineering, mining & overseas • Framework agreements with United Utilities and Network Rail are progressing well • Developing relationship with Shanks Waste Service - second waste management facility successfully completed UK civil engineering • In Jamaica early works pr
Slide 16: Kier Construction: Mining
Kier Construction • Greenburn performing well nearly one million tonnes mined • 58% of remaining coal forward sold at favourable fixed prices • Further opportunities are being explored to extend the mine • ‘Opencaster of the Year Award’ Mining Kier Group plc interim results for the six months to 31
Slide 17: Support Services: performance
Kier Support Services: performance Support Services Six months to 31 December 2005 2004 Revenue £139.1m £113.9m Operating margin* 2.8% 2.8% Kier Support Services Order book £1,309m £1,137m Comprehensive facilities Cash/(debt) £8.6m (£11.7m) management, reactive and planned building * Before amortisa
Slide 18: Support Services: four business streams
Kier Support Services: four business streams • Building Maintenance: • Local authority maintenance contracts and decent homes • Excellent opportunities for growth • Managed Services: • Good opportunities in PFI, £128m secured in the six months to 31 December 2005 • Opportunities to work with other G
Slide 19: Support Services: Building Maintenance
Kier Support Services: Building Maintenance Local authority Total value of Length of Number of revenue (£m) contract properties Repairs & Maintenance Sheffield City Council 640 10 years 54,000 Leeds 51 5 years 23,600 Islington Borough Council 260 10 years 28,000 Ealing Borough Council 23 5 years 9,2
Slide 20: Residential: performance
Kier Residential: performance Homes Six months to 31 December Year to 30 June 2005 2004 Change 2005 % Unit sales (units) 709 721 -1.6 1,215 Average selling price (£) 185,900 180,500 +3.0 181,700 Kier Residential Revenue from housing (£m) 131.8 130.1 +1.3 220.8 High quality private housebuilding. Lan
Slide 21: Residential: completions, average sales price & plot cost
Kier Residential: completions, average sales price & plot cost Six months to 31 December 2005 2004 Units ASP (£) Units ASP (£) Allison Homes 262 156,200 251 163,500 Bellwinch Homes 132 196,500 162 200,900 Kier Homes 104 209,900 115 162,700 Twigden Homes 211 204,500 193 196,200 709 185,900 721 180,50
Slide 22: Residential: map
Kier Residential: map Allison Bellwinch Twigden Kier Kier Group plc interim results for the six months to 31 December 2005 22
Slide 23: Property
Kier Property Six months to 31 December Property 2005 2004 £m £m Operating profit: Kier 2.9 2.3 Kier Property Joint venture 2.5 1.4 Commercial property development. 5.4 3.7 31 Schemes Gross Floor space development value 8 office schemes £328m 1.4m sq ft 19 industrial schemes £322m 2.4m sq ft 4 retai
Slide 24: Property: recent developments
Kier Property: recent developments • Acquisition of nine properties from Warner Estates - one transferred to Kier Residential for housing development • Purchase of site in Milton Keynes for UK headquarters of EDS - Kier Regional undertaking construction Western International Markets • Planning conse
Slide 25: Examples of Kier 'Total Solution'
Examples of Kier ‘Total Solution’ • Preferred bidder on Ordnance Survey site Southampton: • Kier Property: development of offices • Kier Residential: potential development of residential sites • Kier Regional: construction of offices • Kier Support Services: facilities Ordnance Survey management and
Slide 26: Project Investment
Kier Project Investment Infrastructure Investment • Creates value for the Group: • Negotiated construction and FM contracts • Creates an equity Kier Project portfolio: Investment Promotes and • Generates a stream of manages the Group’s interests in the Private predictable earnings Finance Initiative
Slide 27: Project Investment: current projects
Kier Project 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 1.6 50 Hinchingbrooke Operational 19 1.1 50 Ipswich Hospital Preferred bidder 27 1.5 50 Local Bo
Slide 28: Prospects
Prospects • Order books for Construction and Support Services at strong levels • Homes order book 50% ahead of last year, 90% of projected units for full year are secure • Property Development - strong pipeline of developments • PFI - success continues • Value from mixed-use developments combining s
Slide 29: Building confidence
Kier Group plc Interim results for the six months to 31 December 2005 16 March 2006 Building confidence