Kier鈥檚 pre-tax profit has fallen by 47% to 拢16.7m in its latest interim results, due to .
The provision Kier has made for the fine 鈥� which the firm has appealed against, but does not expect any verdict on until the end of the year 鈥� spoilt an otherwise healthy set of results.
Underlying profit before tax for the six months to 31 December 2009 was 拢30.5m (2008: 拢25.3m). The firm also banked 拢4.2m from the sale of two PFI investments.
Total revenue was down slightly at 拢1,009.8m (2008: 拢1,108.7m).
In Construction, Kier鈥檚 order book has grown to 拢2.2bn (2008: 拢1.9bn). The firm reported all of its targeted revenue for the current financial year and 73% of targeted revenue for the following financial year is already secure or 'probable'.
Construction margins are holding up at 2.5% for the six months (2008: 2.4%) and its cash position remains strong.
In Support Services, order books have grown to 拢2.3bn (2008: 拢1.8bn), operating margins have grown to 4.4% (2008: 4.0%) and cash balances have increased.
Kier said conditions for its Partnership Homes and Developments businesses remain challenging but 鈥渢he financial performance improvement in each of these businesses reflects a slight easing in the market鈥�.
The cash performance was strong in the period reflecting the sale, by Kier Property, of the UK Supreme Court investment which generated over 拢30m. Net cash balances in the period averaged 拢71m (2008: 拢61m), ending the period at a net balance of 拢130.7m (2008: 拢82.2m).
However, net assets at 31 December 2009 were reduced to 拢75.5m (June 2009: 拢89.3m) reflecting a net deficit of 拢63.1m the Kier Group Pension Scheme (December 2008: surplus of 拢2.7m, June 2009: net deficit 拢69.2m). As a result, the group will make an additional special cash contribution to the scheme amounting to 拢13.2m.
Group chief executive John Dodds, who will shortly be replaced by Paul Sheffield, said: 鈥淜ier Group has continued to perform well and in line with expectations. The public sector deficit give rise to concerns over the future levels of public sector spending.
"Notwithstanding that, our order book has grown and Kier is on over 50 construction framework agreements, both public and private, which provide comfort that we will grow our market share whilst delivering value to our clients."
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