Kier Group Plc · LSE:KIE
Kier — H1 2009 Earnings Presentation
30 slides from Kier's earnings presentation, Feb 25, 2009
Slide 1: Interim Results Presentation
INTEGRATED EXCELLENCE KIER GROUP PLC INDIVIDUAL FLAIR INTERIM RESULTS Six months to PRESENTATION 31 December 25 February 2008 2009
Slide 2: Interim Highlights
INTERIM HIGHLIGHTS • Underlying pre-tax profits* at £26.4m (2007: £45.6m) • Underlying EPS* at 51.1p (2007: 90.3p) • Interim dividend maintained at 18.0p • £82.2m of net cash at 31 December 2008 (2007: £135.9m) – further investment in UK Supreme Court and land commitments • Order books for Construct
Slide 3: Revenue
REVENUE SIX MONTHS TO 31 DECEMBER Construction (£794.2m) Construction (£781.9m) Support Services (£224.4m) Support Services (£179.3m) Partnership Homes (£67.5m) Partnership Homes (£177.4m) Developments (£22.6m) Developments (£66.9m) 2008 (£1,108.7m) 2007 (£1,205.5m) 2% 5% 6% 15% 20% 15% 65% 72% Kier
Slide 4: Underlying Pre-Tax Profit
UNDERLYING PRE-TAX PROFIT SIX MONTHS TO 31 DECEMBER Before Including exceptional Exceptional exceptional Change to pre- items items items exceptional 2008 2008 2008 2007 results £m £m £m £m % Operating profit: Group 25.6 10.1 35.7 41.9 -38.9 Operating profit: joint ventures 0.6 (5.3) (4.7) 2.8 -78.6
Slide 5: Exceptional Items
EXCEPTIONAL ITEMS SIX MONTHS TO 31 DECEMBER YEAR TO 30 JUNE 2008 2008 £m £m Credit from change in salary related pension benefits 24.3 - Partnership Homes reorganisation and restructuring costs (0.8) (9.5) Partnership Homes land write-downs (12.2) (26.6) Developments write-downs: Group (1.2) (1.5) j
Slide 6: Earnings Per Share and Dividend
EARNINGS PER SHARE AND DIVIDEND SIX MONTHS TO 31 DECEMBER YEAR TO 30 JUNE 2008 2007 Change 2008 % Dividend per share 18.0p 18.0p 0.0 55.0p Weighted average number of shares 36.4m 36.0m +1.1 36.1m Dividend cover (based on adjusted EPS) 2.8x 5.0x - 3.2x Adjusted profit before tax excluding exceptional
Slide 7: Segmental Analysis
SEGMENTAL ANALYSIS BEFORE EXCEPTIONAL ITEMS SIX MONTHS TO 31 DECEMBER YEAR TO 30 JUNE 2008 2007 Change 2008 £m £m % £m Revenue: Construction 794.2 781.9 +1.6 1,584.5 Support Services 224.4 179.3 +25.2 393.7 Partnership Homes 67.5 177.4 -62.0 311.5 Developments 22.6 66.9 -66.2 84.5 1,108.7 1,205.5 -8
Slide 8: Balance Sheet Summary
BALANCE SHEET SUMMARY AT 31 DECEMBER AT 30 JUNE 2008 2007 Change 2008 £m £m £m £m Intangible assets 12.3 12.6 -0.3 13.4 Property, plant and equipment 92.5 84.6 +7.9 92.2 Investments in joint ventures 28.6 32.2 -3.6 39.9 Inventories 515.6 482.9 +32.7 516.4 Other working capital (509.0) (499.7) -9.3 (
Slide 9: Balance Sheet Items
BALANCE SHEET ITEMS AT 31 DECEMBER AT 30 JUNE 2008 2008 Change £m £m £m Residential land 264.4 276.0 -11.6 Residential WIP 164.5 161.7 +2.8 Commercial land and WIP 35.5 24.8 +10.7 Other WIP 51.2 53.9 -2.7 Inventories 515.6 516.4 -0.8 Land commitments 51.0 56.4 -5.4 Kier Group plc interim results for
Slide 10: Pensions
PENSIONS IAS 19 AT 31 DECEMBER AT 30 JUNE 2008 2007 Change 2008 £m £m £m £m Kier Group Pension Scheme: Market value of assets 551.4 535.3 +16.1 538.4 Present value of liabilities (547.7) (576.1) +28.4 (584.1) Surplus (deficit) in the scheme 3.7 (40.8) +44.5 (45.7) Deferred tax (liability) asset (1.0
Slide 11: Cash Flow
CASH FLOW SUMMARY FOR THE SIX MONTHS TO 31 DECEMBER 2008 AT 31 DECEMBER AT 30 JUNE 2008 2008 Change £m £m £m Construction 410.0 409.5 +0.5 Support Services 19.7 17.4 +2.3 Partnership Homes (280.8) (242.6) -38.2 Developments (49.8) (24.9) -24.9 Centre (16.9) (15.5) -1.4 Net cash 82.2 143.9 -61.7 Part
Slide 12: Regional Revenue vs Average Cash 2000 to 2008
KIER REGIONAL REVENUE VS AVERAGE CASH 2000 TO 2008 Kier Group plc interim results for the six months to 31 December 2008 12
Slide 13: Construction Key Performance Indicators
CONSTRUCTION KEY PERFORMANCE INDICATORS SIX MONTHS TO 31 DECEMBER YEAR TO 30 JUNE 2008 2007 Change 2008 £m £m % £m Revenue 794.2 781.9 +1.6 1,584.5 Operating profit 19.0 13.9 +36.7 36.6 Operating margin 2.4% 1.8% - 2.3% Cash at period end 410.0 373.3 +9.8 409.5 Order book 1,490 1,530 -2.6 1,600 Kier
Slide 14: Construction Key Markets
CONSTRUCTION KEY MARKETS % AWARDS BY SECTOR SIX MONTHS TO 31 DECEMBER YEAR TO 30 JUNE 2008 2007 2008 Education Custodial Other Public sector awards 67% 50% 50% Energy Residential Private sector awards 33% 50% 50% Commercial Transport 100% 100% 100% Health Retail Negotiated and two-stage bids 65% 80%
Slide 15: Construction Markets and Opportunities
CONSTRUCTION MARKETS AND OPPORTUNITIES SECTOR FRAMEWORKS OPPORTUNITIES EDUCATION • Academies framework • £340m awarded/preferred bidder: • £400m of awards • Three projects on site at £70m • 40% in frameworks • Appointed preferred bidder on £270m of work including: Norfolk, Wirral, Sefton, Cumbria, L
Slide 16: Construction Markets and Opportunities
CONSTRUCTION MARKETS AND OPPORTUNITIES SECTOR FRAMEWORKS OPPORTUNITIES HEALTH • ProCure 21 • Has provided Kier with £324m to date and we continue to bid for new projects typically in the • £34m of awards £3m to £15m range • 53% in frameworks CUSTODIAL • Ministry of Justice • Several custodial projec
Slide 17: Construction Markets and Opportunities
CONSTRUCTION MARKETS AND OPPORTUNITIES SECTOR FRAMEWORKS OPPORTUNITIES REGULATED • Network Rail East • Kings Cross roof refurbishment bid EXPENDITURE Anglian Structures • Crossrail opportunities framework • United Utilities AMP4 • AMP5 water framework in North West (KMI+) framework agreement North W
Slide 18: Construction Prospects
CONSTRUCTION CONSTRUCTION PROSPECTS • Order books are good: 95% secure for 2009 • Around 80% secure and probable for 2010 • Cash at £410.0m continues to be healthy • Public sector frameworks • Private sector expenditure needed on: • Energy • Airports • Transport • Water Kier Group plc interim result
Slide 19: Support Services Key Performance Indicators
KIER SUPPORT SERVICES KEY PERFORMANCE INDICATORS SIX MONTHS TO 31 DECEMBER YEAR TO 30 JUNE 2008 2007 Change 2008 £m £m % £m Revenue 224.4 179.3 +25.2 393.7 Operating margin* 4.0% 4.0% - 4.0% Cash at period end 19.7 18.9 +4.2 17.4 Order book: Building Maintenance 1,199 1,044 +14.8 1,379 Facilities Se
Slide 20: Support Services Four Business Streams
KIER SUPPORT SERVICES FOUR BUSINESS STREAMS • Building Maintenance: SIX MONTHS TO 31 DECEMBER YEAR TO 30 JUNE • Local authority and Housing 2008 2007 Change 2008 £m £m % £m Association maintenance contracts and Decent Homes Revenue: • Facilities Services: Building Maintenance 169.3 127.8 +32.5* 288.
Slide 21: Building Maintenance: Secured Forward Revenue
KIER SUPPORT SERVICES BUILDING MAINTENANCE: SECURED FORWARD REVENUE AS AT 31 DECEMBER 2008 Kier Group plc interim results for the six months to 31 December 2008 21
Slide 22: Support Services Prospects
KIER SUPPORT SERVICES PROSPECTS • Shortlisted on North Tyneside at £40m pa for 10 years – 16,000 social homes • Good visibility in revenue on long-term contracts • Requirement for social housing maintenance continues • Opportunities for further outsourcing • Shortlisted on Sheffield City Council fac
Slide 23: Partnership Homes Restructured
KIER PARTNERSHIP HOMES RESTRUCTURED KIER RESIDENTIAL Kier Allison Bellwinch Kier Homes Kier Homes Twigden Partnership Homes Homes Northern Scotland Homes Homes Ltd KIER HOMES KIER PARTNERSHIP HOMES Production & Development Finance Commercial customer & affordable director director services housing d
Slide 24: Partnership Homes Key Performance Indicators
KIER PARTNERSHIP HOMES KEY PERFORMANCE INDICATORS SIX MONTHS TO 31 DECEMBER YEAR TO 30 JUNE 2008 2007 Change 2008 £m £m % £m Revenue: Social 36.5 48.0 -24.0 95.7 Private 31.0 129.4 -76.0 215.8 67.5 177.4 -62.0 311.5 Kier Partnership Homes Roke Lane, Witley Operating profit 0.4 20.5 -98.0 32.1 Unit s
Slide 25: Partnership Homes Unit Sales
KIER PARTNERSHIP HOMES UNIT SALES: SIX MONTHS TO 31 DECEMBER • Adding value: Social – contracting 2008 • Conversion of private housing Social – owned land sites to social housing Private • Conversion of private housing 195 sites to mixed use and commercial if appropriate 267 • HomeBuy Direct Equity
Slide 26: Developments Key Performance Indicators
KIER DEVELOPMENTS KEY PERFORMANCE INDICATORS SIX MONTHS TO 31 DECEMBER YEAR TO 30 JUNE 2008 2007 Change 2008 £m £m % £m Revenue: Property 14.7 58.3 -75.0 69.6 PFI 7.9 8.6 -8.1 14.9 22.6 66.9 -67.1 84.5 Kier Property Operating profit: UK Supreme Court Property 0.6 7.5 -92.1 12.0 • Consolidation of: P
Slide 27: Property Highlights
KIER PROPERTY HIGHLIGHTS • Good construction progress at Supreme Court – completion March 2009 • Completion of fruit and vegetable market at Hounslow releases site for re-development • Good construction progress at Reading on 216,000sq ft Kier Property One Reading Central development – pre-let to Ye
Slide 28: Project Investment Key Performance Indicators
KIER PROJECT INVESTMENT KEY PERFORMANCE INDICATORS • Appointed preferred bidder on Kier Project Investment Garrett Anderson Police Investigation Centres: Centre, Ipswich six facilities across Norfolk and Suffolk for £60m • Shortlisted on: • Woking Social Housing • Liverpool Library • Sussex Care Hom
Slide 29: Project Investment Current Projects
KIER PROJECT INVESTMENT CURRENT PROJECTS SECTOR PROJECT STATUS CAPITAL 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 authority Bournemouth Library Operational 14 0.7
Slide 30: Prospects
PROSPECTS • Excellent public sector awards and opportunities coming through for Support Services and Construction • Power station opportunities for Kier Construction based on excellent track-record • Partnership Homes generating sales and revenue in line with targets • Property markets slow but pros