Kier is confident continued Government spending will keep its order books full as pre-tax profits and turnover both increased during the back end of last year.

Latest results for the six months to December 31 2024 show turnover up 6% to £1.97bn from £1.86bn with a similar increase in pre-tax profits to £28.6m from £27m.

The contractor’s order book hit £11bn with 98% of work secured for this financial year.

Kier said 91% of its work is with the public sector and regulated companies.

It added: “We believe UK infrastructure spending commitments are driven by structural demand which have a positive influence on Kier’s chosen markets. Population growth, transportation pressures, aged infrastructure, energy security and climate change are significant drivers of structural growth in the markets in which we operate.

“Given that public funding may be insufficient to maintain public assets, customer behaviours are shifting further towards long-term partnerships. These continue to favour Kier, given our scale, integrated design and project management capability, track record of delivery and Environment, Social and Governance credentials. “

Kier currently works on around 400 projects at any one time with an average order size of £21m in the construction business which “given its modest size, limits our risk exposure in the event a project does not go to plan.”

The group’s net cash position at 31 December 2024 grew to £57.9m from £17m last time despite improving supplier payment days to 33 as the strong volumes translated into cash receipts.

Andrew Davies, Chief Executive, said: “The Group has continued to make significant operational and financial progress. The first half saw Kier deliver increased revenue and profitable growth whilst maintaining strong margins.

“We continued to grow the order book which, at £11bn, provides us with good multi-year visibility. Our strong cash performance allowed us to significantly increase the interim dividend payment and commence an initial £20m share buyback programme in January 2025.

“I am also particularly pleased to report that the Group significantly improved both its period-end net cash position and its average month-end net debt position and the Board has confidence in sustaining this momentum going forward.

“These developments are testament to the hard work and commitment of our people who have enhanced our resilience and strengthened our financial position.

“The second half of the financial year has started well, and we are trading in-line with the Board’s expectations.

“The Group is confident in sustaining the strong cash generation achieved over the last few years and is well positioned to continue benefiting from UK Government infrastructure spending commitments. Kier operates in markets which are vital to the UK. We remain committed to delivering our long-term sustainable growth plan which will benefit all stakeholders.”