Kier FY25 results: revenue growth, margin progress and a record £11.0bn order book
Kier Group has delivered another tidy year. Revenue rose 3% to £4,087.8 million, adjusted operating profit was up 6% to £159.1 million, and the adjusted margin nudged up 10bps to 3.9%. Statutory operating profit improved 10% to £113.7 million.
Crucially for income investors, the total dividend is hiked 38% to 7.2p, alongside an ongoing £20 million share buyback launched in January 2025. Management says FY26 trading has started slightly ahead of the Board’s expectations and 91% of FY26 revenue is already secured.
Headline numbers you need to know
| Metric | FY25 | FY24 | Change |
|---|---|---|---|
| Group revenue incl. JVs | £4,087.8m | £3,969.4m | +3% |
| Adjusted operating profit | £159.1m | £150.2m | +6% |
| Adjusted operating margin | 3.9% | 3.8% | +10bps |
| Adjusted PBT | £125.4m | £118.1m | +6% |
| Statutory PBT | £78.1m | £68.1m | +15% |
| Adjusted EPS | 21.6p | 20.6p | +5% |
| Free cash flow | £155.4m | £185.9m | -16% |
| Net cash (year end) | £204.1m | £167.2m | +22% |
| Average month-end net debt | £(49.2)m | £(116.1)m | Improved £67m |
| Order book | £11.0bn | £10.8bn | +2% |
| Total dividend | 7.2p | 5.2p | +38% |
“Adjusted” strips out one-off items such as amortisation of acquired intangible assets and fire/cladding charges; it’s a common way to show underlying trading.
Cash, balance sheet and visibility look stronger
Cash generation remains a bright spot. Operating cash conversion hit 125%, comfortably above the 90% long-term target. Year-end net cash rose to £204.1 million and average month-end net debt improved to £(49.2) million from £(116.1) million. The group also repaid the remaining US private placement notes and now has £400 million of committed liquidity (Senior Notes £250 million to 2029; RCF £150 million to 2027).
The order book edged up to a record £11.0 billion, with 91% of FY26 revenue and about 70% of FY27 already secured. Around 60% of the order book is under target cost or cost reimbursable contracts, which helps manage inflation risk.
Dividend up 38% and buyback underway
The Board proposes a final dividend of 5.2p, taking the total to 7.2p, covered 3x by adjusted earnings. Key dates: shares go ex-dividend on 30 October 2025, record date 31 October, and payment on 3 December 2025. The £20 million buyback started in January 2025 was over 30% complete by 30 June 2025.
Opinion: the combination of rising dividends, a buyback and a stronger balance sheet signals confidence and discipline in capital allocation. It also broadens the appeal to income-focused holders after the dividend’s return last year.
Segment performance: where the growth came from
Infrastructure Services: revenue up, profit steady
- Revenue £2,136.0 million, up 7% as HS2 works accelerated and water/nuclear activity increased.
- Adjusted operating profit £111.0 million, down 1% due to a one-off £6 million claim benefit in the prior year; excluding that, underlying growth would be 4%.
- Margin 5.2% (down 40bps). Order book £6.5 billion; 87% of FY26 revenue secured.
- Notable win: first Southern Water AMP8 contracts totalling about £45 million.
View: good top-line momentum with some timing drag from RIS3 and CP7 starts. The AMP8 water cycle and energy/nuclear workstreams should underpin growth through the cycle.
Construction: mix improving, margins edging up
- Revenue £1,910.5 million, flat year on year.
- Adjusted operating profit £75.0 million, up 8%; margin up 30bps to 3.9%.
- Order book £4.5 billion; 95% of FY26 revenue secured.
- Key awards: >£100 million HMP Northumberland block; four education projects worth c.£210 million; Kier Places five-year FM contract with Wiltshire Council at £3.4 million p.a.
Note the £17.0 million adjusting charge for fire and cladding compliance. That remains a sector-wide overhang, though Kier continues to work through legacy issues and reports insurance recoveries within the total.
Property: less revenue, more profit
- Revenue £38.4 million (down 46%) given a large one-off sale last year and more land sales this year.
- Adjusted operating profit £12.2 million, up 97%; margin 31.8%.
- Capital employed £198 million, up 19%; ROCE 6.7%, moving towards the 15% FY28 target.
- Nine transactions completed vs five last year; continued progress at Watford Riverwell and multiple TradeCity schemes.
Interpretation: management is leaning in here, and the portfolio is seasoning. Returns are not yet at target, but direction of travel is positive.
Strategy, ESG and operating discipline
Kier continues to focus on UK Government, regulated industries and long-term frameworks – areas where it is already a strategic supplier. With over 400 live projects and a modest average order size of c.£20 million in Construction, risk is spread sensibly.
ESG credentials support bidding: Scope 1 and 2 emissions fell another 4.3% year on year and are down 71% since FY19. Safety metrics improved materially (AIR down 25.8%). 71% of FY25 revenue is from green products and services, up from 69%.
The balanced view: why it matters and what to watch
Positives
- Record £11.0 billion order book with strong multi-year visibility.
- Margins progressing towards the 4.0%-4.5% medium-term target; Construction mix improving.
- Cash generation strong; net cash up and average net debt down sharply.
- Shareholder returns stepping up: 7.2p dividend (3x cover) plus buyback.
- Well-aligned to UK infrastructure spend across transport, water, energy, justice, health and education.
Watch-outs
- Free cash flow fell to £155.4 million from £185.9 million due to normalised working capital and higher interest; still healthy, but worth tracking.
- Infrastructure Services margin dipped and relies on programme timings (RIS3 and CP7).
- Fire and cladding compliance costs remain a drag (£17.0 million this year); provisions and insurance recoveries will be an ongoing item.
- Pension surplus reduced to £47.2 million from £80.5 million after actuarial losses.
- Effective tax rate rose to 27.8%.
Outlook and my take
Management says FY26 has started slightly ahead of Board expectations. With 91% of FY26 revenue secured and c.70% of FY27 in the bag, Kier has enviable visibility. The balance sheet is sturdier, liquidity is ample, and the long-term plan targets a 4.0%-4.5% adjusted operating margin with c.90% cash conversion through the cycle.
In my view, this is a solid delivery year that builds trust: incremental margin gains, disciplined bidding, and cash discipline translated into higher shareholder returns. The remaining homework is clear – push margins through 4%, keep working capital tight, and lift Property ROCE towards 15% by FY28. If those boxes keep getting ticked, the case for steady compounding strengthens.
Key dates and helpful details
- Ex-dividend date: 30 October 2025
- Record date: 31 October 2025
- Dividend payment: 3 December 2025 (final dividend 5.2p; total FY25 dividend 7.2p)
- Retail investor presentation: 25 September 2025, 10:30
Bottom line
Kier’s FY25 update shows profitable growth, improving margins and a stronger balance sheet, underpinned by a record order book. The 38% dividend uplift and buyback are not window dressing – they are backed by cash. There are still moving parts in Infrastructure Services timing and legacy compliance costs, but the direction of travel remains positive. For investors seeking exposure to UK infrastructure with growing income, Kier just strengthened its pitch.
