Strong performance in residential contributes to ‘solid’ half-year results for Kier.
Kier Group plc has announced ‘solid’ half-year results to 31 December 2016, supported by good performance in its residential division.
Kier Living saw revenue increase 4% to £169m and the company confired that it is on track to deliver over 2,200 homes for the full year in a mix of private and mixed tenure units. The company has invested £30m in its housing portfolio in the period.
It has also announced a joint venture (JV) with Cross Keys Homes, a housing association and care services provider in the East of England.
Kier will transfer 13 of its residential developments in the east of England, valued at up to £97m, into the JV, which will generate up to £64m cash for reinvestment. The company will also provide its development, land-buying, construction and sales expertise to the JV, with Cross Key Homes providing access to key strategic relationships in the region for the benefit of the JV. Kier has announced that it will hold a 90% shareholding and Cross Keys Homes will have a 10% shareholding in the joint venture.
Kier and Cross Keys Homes have a long-standing relationship in the eastern region, operating in complementary sectors of the housing market and most recently working together on the redevelopment of Peterborough district hospital to provide 43 properties.
John Anderson, executive director, Kier Living said: “This joint venture represents a strategic milestone in our five year strategy for Kier Living and will allow us to build on our strong track record in the East of England and leverage the value of 13 of our key sites. Kier and Cross Key Homes have worked well together in the past and the joint venture provides a long term sustainable relationship, building on our mutual track records.”
Revenue in the private housing business was stable at £82m with improved operating profit of £6.8m. The business delivered 375 completions from its own land bank and has a current forward order book that represents more than 85% of the units forecast for completion by 30 June 2017. The company announced that the division remains on course to deliver circa 700 private housing completions by the year-end.
John Anderson continued: “This is a good set of results for Kier Living, and our blend of private and mixed tenure housing is continuing to stand us in good stead. We’re making good progress towards our Vision 2020 target of 4,000 completions a year, and our experience and expertise in both the private and public sector puts us in a great position to play an active role in delivering the Government’s housing strategy and help clients to tackle the housing shortage.”