Kier says optimistic about UK recovery, ups dividend

Reuters

LONDON (Reuters) - Construction company Kier Group (LSE:KIE) said it was optimistic that the British economy was recovering after seeing positive signs in all its businesses, and increased its dividend despite a fall in full-year profits and revenue.

Kier said on Thursday underlying pre-tax profits for the year to the end of June fell to 63.4 million pounds from 70 million pounds in the year before, in line with its own expectations. Earnings per share declined to 136.2 pence from 156.8 pence.

"The modest decline in revenue and profit reflects the tough trading conditions the industry has faced during the year," Chief Executive Paul Sheffield said.

"After nearly five years of recessionary pressure, we are seeing positive signs of improvement in all our principal businesses, which gives rise to cautious optimism that the economy is recovering," he said.

The company bumped up its full year dividend by 3 percent to 68 pence, citing confidence in its future performance.

Britain's construction market is only starting to recover following the financial crisis. British construction activity grew at the fastest pace in nearly six years in August, driven by residential building, a survey showed last week.

Kier said that the bulk of targeted revenue for its construction and services divisions for 2014 was secure, with order books maintained at more than 4 billion pounds.

It said that following the completion of its 221 million pound acquisition of infrastructure and maintenance firm May Gurney in July, its combined order book now stood at 5.9 billion pounds across those divisions which stretched beyond 2020.

Its property division had a pipeline of 1.5 billion pounds and will be a key contributor to the company's results in the coming years, Kier said.

Shares in Kier closed at 1667 pence on Wednesday, valuing the company at 897 million pounds.

(Reporting by Brenda Goh; editing by Keith Weir)

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