Infrastructure services-to-construction company Kier (LON:KIE) reported forecast-beating FY26 results and upgraded FY27 guidance. Earnings for the current year will be at the top end of the board’s prior expectations, supported by strong order book growth.
The FTSE 250 firm also unveiled updated medium-term financial targets. These include double-digit adjusted earnings per share (EPS) growth, an adjusted operating margin of 4% to 4.5% and an average net cash position north of £200 million by FY29.
Solid foundations
Results for the year to June 2026 showed a 7.5% rise in revenue to over £4.39 billion. Adjusted pre-tax profits grew 8.8% to £136.4 million. And Kier maintained its operating margin at 3.9%.
The company reported an average net cash position of £10.7 million for the year, its first such milestone in over a decade. That compared with average net debt of £49.2 million in FY25. Year-end net cash grew 13.9% to £232 million.
Bulging order book
The order book grew 8% to a record £11.9 billion at the year end, securing over 95% of forecast FY27 revenues.
‘Activity levels for the group were particularly high in water, supported by Kier’s in-house design management, which enables early-stage customer engagement and integrated solution delivery,’ said the company.
| Year to June 2026 | Change | |
| Revenue (£m) | 4,393 | 7.5% |
| Adjusted PBT (£m) | 136.4 | 8.8% |
| Operating margin | 3.9% | – |
Source: Kier Group, H1 results
‘This momentum was supported by key framework positions across the justice & borders, education, healthcare and defence sectors, combined with a strong, well established footprint in the London private sector commercial market.’
CEO Stuart Togwell insisted: ‘We enter FY27 with strong foundations and clear strategic priorities, to make the most of the sizeable opportunity in front of us.’
Our July prediction that Kier could deliver further upgrades given its positive momentum and bulging order book has been proven right. Typically, we aren’t huge fans of low margin construction businesses such as this.
However, Togwell is clearly building a ‘stronger, more focused Kier’. And crucially, balance sheet risk is reducing.
Furthermore, the company is leveraged to structurally supported UK infrastructure markets where spend is long-term, regulated or politically prioritised. And roughly 90% of its revenue is generated from public sector and regulated clients.
According to Stockopedia, Kier trades on a palatable forward price-to-earnings ratio of 10.4 times and offers a decent 3.2% yield. We see scope for further upgrades as the transformation continues and stick with our positive stance on the stock.
