Slide 1: Preliminary results presentation
Kier Group plc Preliminary results presentation 14 September 2006
Slide 2: Highlights
Highlights • 14th year of continuous growth • Pre-tax profits before exceptionals up 23.6% to £59.1m (2005: £47.8m) • EPS before exceptionals up 25.1% to 120.8p (2005: 96.6p) • Full year dividend increased by 17.1% to 26.0p (2005: 22.2p) • £96.6m of cash generated from operating activities • Constru
Slide 3: EPS record since 1996
EPS record since 1996 (after flotation) 140 • 14th year of UK GAAP IFRS continuous 120 growth since 100 buyout in 1992 80 • Compound pence growth in EPS 60 of 23% per 40 annum since flotation in 20 1996 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 years Record shown after deducting amortisati
Slide 4: Financial summary
Financial summary consolidated income statement Year to 30 June 2006 2005 Change £m £m % Revenue 1,838.3 1,623.2 +13.3 Operating profit - Group 56.0 48.1 +16.4 Operating profit - joint ventures 7.2 5.2 +38.5 Group and share of joint ventures 63.2 53.3 +18.6 Share of joint ventures - finance cost (2.
Slide 5: Financial summary (continued)
Financial summary (continued) Year to 30 June 2006 2005 Change % Dividend per share 26.0p 22.2p +17.1 Dividend cover (based on basic earnings per share) 4.6x 4.7x - Underlying earnings per share excluding exceptional items - undiluted 120.8p 96.6p +25.1 - fully diluted 118.8p 95.8p +24.0 Adjusted ea
Slide 6: Performance by segment
Performance by segment Year to 30 June 2006 2005 Change £m £m % Revenue: Construction 1,218.1 1,086.3 +12.1 Support Services 281.3 237.4 +18.5 Homes 277.9 225.5 +23.2 Property 47.5 62.2 -23.6 Infrastructure Investment 13.5 11.8 +14.4 1,838.3 1,623.2 +13.3 Operating Construction 18.0 13.8 +30.4 profi
Slide 7: Segmental analysis
Segmental analysis net operating assets At 30 June 2006 2005 Change £m £m £m Construction (215.3) (186.1) -29.2 Support Services (0.9) 11.1 -12.0 Homes 238.8 245.6 -6.8 Property 39.4 24.4 +15.0 Infrastructure Investment (3.3) (1.7) -1.6 Centre (61.4) (98.6) +37.2 (2.7) (5.3) +2.6 Cash, net of debt 1
Slide 8: Balance sheet
Balance sheet summary At 30 June 2006 2005 Change £m £m £m Intangible assets 14.8 16.7 -1.9 Property, plant and equipment 78.5 75.8 +2.7 Investments in joint ventures 20.8 22.9 -2.1 Inventories 377.8 325.7 +52.1 Other working capital (431.6) (335.8) -95.8 Cash (net) 141.3 88.2 +53.1 Long-term borrow
Slide 9: Pensions
Pensions IAS 19 At 30 June 2006 2005 Change £m £m £m Kier Group Pension Scheme: Market value of assets 467.0 393.5 +73.5 Present value of liabilities (534.0) (517.2) -16.8 Deficit in the scheme (67.0) (123.7) +56.7 Deferred tax asset 20.1 37.1 -17.0 Net pension liability (46.9) (86.6) +39.7 Net effe
Slide 10: Cash flow
Cash flow summary for the year to 30 June 2006 £m Opening net funds at 30 June 2005 58.1 Cash inflow before movements in working capital 71.2 Special contributions to pension fund (31.5) • Excellent cash Other working capital movements 56.9 generation from Cash inflow from operating activities 96.6
Slide 11: Group structure
Group structure (revenue figures for the year to 30 June 2006) 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 projects deli
Slide 12: Construction key performance indicators
Construction key performance indicators Construction Year to 30 June 2006 2005 Operating margin 1.5% 1.3% Cash at 30 June £298.7m £258.2m Regional Contracting Order book £1,270m £1,030m Mid-range construction projects delivered by locally managed Contract awards £1,311m £1,372m business units across
Slide 13: Regional
Kier Regional Regional contracting, building major projects, affordable housing Year to 30 June 2006 2005 Contract awards £1,216m £1,018m Public sector awards 43% 41% Private sector awards 57% 59% 100% 100% Negotiated and two-stage bids 65% 59% Competitive tender 35% 41% 100% 100% Average contract s
Slide 14: Regional cash and interest bearing funds
Kier Regional cash and interest bearing funds £'M 275 250 225 200 175 150 125 100 75 Jun 98 Jun 99 Jun 00 Jun 01 Jun 02 Jun 03 Jun 04 Jun 05 Jun 06 Kier Group plc preliminary results for the year ended 30 June 2006 14
Slide 15: Regional key markets and opportunities
Kier Regional key markets and opportunities • Education: • PFI schools • Academies national framework • Building schools for the future • Universities and colleges • Commercial property: • DVLA Swansea • Kier Property projects • Arlington business parks • Residential: • Newlon Housing Association •
Slide 16: Construction: UK civil engineering, mining and overseas
Kier Construction UK civil engineering, mining and overseas • UK: • Working with Kier Property and Allison Homes on remediation works • Coal production at Greenburn has now exceeded 1.3m tonnes; Rail framework 66% of remaining coal forward sold • Extensions being explored which could take coal produ
Slide 17: Construction: UK civil engineering, mining and overseas
Kier Construction UK civil engineering, mining and overseas • Overseas: • New contract awards in Dubai and Romania • Alcoa opportunities in the Caribbean • Good progress in Jamaica on: • Norman Manley Airport • Half-Way-Tree Transport Centre Kier Group plc preliminary results for the year ended 30 J
Slide 18: Support Services key performance indicators
Kier Support Services key performance indicators Support Services Year to 30 June 2006 2005 Operating margin* 3.1% 2.9% Order book £1,396m £1,204m Kier Support Services Cash/(debt) £12.5m (£2.1m) Comprehensive facilities management, * Before amortisation of intangible asset reactive and planned buil
Slide 19: Support Services four business streams
Kier Support Services four business streams • Building Maintenance: • Local authority and housing association maintenance contracts, Decent Homes and street services • Excellent opportunities for growth • Managed Services: • PFI opportunities mostly in-house • Public sector opportunities • Selective
Slide 20: Building Maintenance
Kier Support Services Building Maintenance • Operations: • Core works: • Reactive and planned maintenance • Decent Homes: • Upgrade of kitchens and bathrooms • Manufacturing: • uPVC windows and kitchen units • Street Services: • Cleaning and domestic waste collection • Grounds maintenance: • Parks/c
Slide 21: Building Maintenance forward workload
Kier Support Services Building Maintenance Forward workload – Local Authority Revenue End date principal contracts Repairs and maintenance Sheffield City Council £56m pa 2013 Leeds City Council £12m pa 2010 Islington Borough Council £30m pa 2010 Greenwich Borough Council £5m pa 2010 Decent Homes She
Slide 22: Residential performance
Kier Residential performance Homes Year to 30 June 2006 2005 Change % Unit sales (units) 1,522 1,215 +25.3 Average selling price (£) 180,100 181,700 -0.1 Kier Residential Revenue from housing (£m) 274.2 220.8 +24.2 High quality private housebuilding. Land sale (£m) 3.7 4.7 -21.3 Total revenue (£m) 2
Slide 23: Residential completions, average sales price and plot cost
Kier Residential completions, average sales price and plot cost Year to 30 June 2006 2006 2005 2005 Units ASP (£) Units ASP (£) Allison Homes 539 154,200 394 165,000 Bellwinch Homes 265 189,000 259 204,500 Kier Homes 201 206,800 185 178,300 Twigden Homes 517 192,200 377 185,200 1,522 180,100 1,215 1
Slide 24: Residential outlook
Kier Residential outlook • Acquisition of Hugh Bourn in July 2006: • 1,197 residential plots • Forms fifth operating area for Kier Residential • Reservations to end of August 68% ahead of last year • Order book at 31 August 45% ahead of last year • 42% unit sales secured for full year – sales biased
Slide 25: Property
Kier Property Property Year to 30 June 2006 2005 £m £m Operating profit: Kier 4.2 5.6 Kier Property Joint venture 5.0 4.8 Commercial property development. 9.2 10.4 31 schemes Gross Floor space development value 8 office schemes £345m 1.9m sq ft 19 industrial schemes £291m 2.9m sq ft 4 retail schemes
Slide 26: Property: industrial
Kier Property industrial • Crown Road, Enfield: first phase sold at strong industrial yield • Planning consent achieved at Western International Market; 500,000sq ft rejuvenation of Heathrow fruit market • Ashtenne: nine-site development portfolio acquired • Debden, Loughton: completed and pre-sold
Slide 27: Property: offices and retail
Kier Property offices and retail • Ordnance Survey: preferred developer for new headquarters and redevelopment of existing site in Southampton including 400 homes • Selected preferred developer by Lord Chancellor’s department to deliver new UK Supreme Court; Kier Regional contractor • Chichester: 45
Slide 28: Regeneration
Kier Regeneration • Fengate: redevelopment of former Anglian Water site in Peterborough; 550 residential units (flats and houses) • Ashford: redevelopment of former rail land; application submitted for 800 flats and commercial • Uxbridge: currently remediating 11-acre gasworks site for major mixed-u
Slide 29: Project Investment
Kier Project Investment Infrastructure Investment • Financial close: • Garrett Anderson Centre, Ipswich Hospital Kier Project • Norwich Schools Investment Promotes and manages the Group’s • Oldham Schools interests in the Private Finance Initiative bringing together • North Kent Police HQ Kier’s exp
Slide 30: 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 Construction 27 1.5 50 Local Bournem
Slide 31: Prospects
Prospects • Order books for Construction and Support Services at record levels • Homes order book at 31 August 45% ahead of last year, 42% of projected units for full year are secure • Property Development: strong pipeline of developments • PFI: new projects are available • Value from mixed-use deve
Slide 32: Five-year record
Five-year record year ended 30 June IFRS UK GAAP 2006 2005 2004 2003 2002 £m £m £m £m £m Turnover 1,838.3 1,623.2 1,476.5 1,445.6 1,382.7 Operating profit (Group + JVs) 63.2 53.3 42.6 36.2 26.2 Total finance (cost)/income net (2.7) (4.3) (2.0) (0.6) 1.1 Joint venture tax (1.4) (1.2) - - - Other - ex
Slide 33: Residential map
Residential map Appendix I Kier Group plc preliminary results for the year ended 30 June 2006 33