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1. Company Snapshot

1.a. Company Description

Kier Group plc primarily engages in the construction business in the United Kingdom and internationally.The company operates through three segments: Construction, Infrastructure Services, and Property.It constructs power stations, roads, bridges, tunnels, and buildings; and provides maintenance services for the U.K. road, rail, and utilities infrastructure, as well as reactive repairs.


The company also provides housing maintenance and facilities management services, as well as environmental services comprising street cleaning, grounds maintenance, and commercial waste services; and invests in and develops property schemes and sites.Kier Group plc was incorporated in 1992 and is headquartered in Salford, the United Kingdom.

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1.b. Last Insights on KIE

Kier Group's recent performance was positively driven by its Full Year 2025 earnings, which showed an increase in EPS to UK£0.13 from UK£0.12 in FY 2024. Revenue grew 4.4% to UK£4.08b. The company's dividend will also increase to £0.052, a larger payout than last year. This growth in earnings and dividend payout may enhance shareholder value. The company's financial results indicate a positive evolution in business conditions.

1.c. Company Highlights

2. Kier Group's FY2025 Results: Strong Order Book and Strategic Growth

Kier Group reported a 3% revenue growth to GBP4 billion, with an adjusted operating profit of GBP159 million, resulting in a 3.9% margin. Earnings per share (EPS) came in at 0.122, slightly below estimates of 0.13. The company's order book stands at a record GBP11 billion, covering 91% of FY2026 revenue and 70% of FY2027 revenue.

Publication Date: Sep -18

📋 Highlights

Financial Highlights

The company's net cash position improved to GBP204 million, with an average month-end net debt of GBP49 million. Kier Group's adjusted EBITDA increased by 10% to GBP228 million, with a free cash flow of GBP155 million, representing a 125% conversion. The company has announced a 38% dividend increase to 7.2p per share and a GBP20 million share buyback program, with 50% already completed.

Valuation Metrics

With a P/E Ratio of 22.97 and an EV/EBITDA ratio of 6.15, Kier Group's valuation appears reasonable. The company's Dividend Yield stands at 2.54%, while its Free Cash Flow Yield is 18.2%. The Net Debt / EBITDA ratio is 0.62, indicating a healthy debt position. According to CFO Simon Kesterton, the company's strong order book and cash position underpin its future growth prospects.

Operational Review

Kier Group's Infrastructure Services revenue grew by 7%, driven by government projects and investments in the water sector. The company's Property division is targeting a 15% ROCE by 2027, with GBP51 million in capital deployed. The leadership transition to Stuart Togwell as CEO is expected to drive further strategic growth and technology adoption.

3. NewsRoom

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Kier Group plc (LON:KIE) Looks Like A Good Stock, And It's Going Ex-Dividend Soon

Oct -28

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Kier Group (LON:KIE) Will Pay A Larger Dividend Than Last Year At £0.052

Oct -07

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Kier Group Full Year 2025 Earnings: EPS: UK£0.13 (vs UK£0.12 in FY 2024)

Sep -17

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Form 8.3 - IQE Plc

Sep -09

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Taylor Wimpey (LSE:TW.): A Fresh Look at Valuation After a Year of Share Price Pressure

Sep -09

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Assessing Diageo (LSE:DGE) Shares: Is the Current Valuation a Missed Opportunity?

Sep -09

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Does Lloyds Offer More Value After Latest UK Interest Rate Decision?

Sep -09

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HSBC sees gradual unwinding of OPEC+ voluntary cuts over next year

Sep -09

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.35%)

6. Segments

Infrastructure Services

Expected Growth: 4.5%

Kier Group plc's Infrastructure Services segment growth of 4.5% is driven by increasing government investments in transportation and energy projects, rising demand for sustainable infrastructure, and strategic contract wins in the highways and rail sectors. Additionally, the company's focus on digital transformation and innovative solutions is enhancing operational efficiency and competitiveness.

Construction

Expected Growth: 4.2%

Kier Group plc's 4.2% growth in Construction is driven by increasing infrastructure investments, government-backed projects, and a growing demand for residential and commercial developments. Additionally, the company's strategic focus on urban regeneration, public-private partnerships, and sustainable construction practices have contributed to its growth momentum.

Property

Expected Growth: 3.8%

Kier Group plc's 3.8% growth in Property segment is driven by increasing demand for affordable housing, strategic partnerships with local authorities, and expansion into new regions. Additionally, the company's focus on mixed-use developments and regeneration projects has contributed to the growth. Furthermore, investments in digital construction and off-site manufacturing have improved efficiency and reduced costs, enhancing profitability.

Corporate

Expected Growth: 5.2%

Kier Group plc's 5.2% corporate growth is driven by strategic acquisitions, increased infrastructure spending, and a strong order book. The company's focus on high-margin businesses, such as highways and utilities, has also contributed to growth. Additionally, cost savings initiatives and operational efficiencies have improved profitability, supporting the company's overall growth momentum.

7. Detailed Products

Construction Services

Kier Group plc provides construction services for public and private sector clients, including building, civil engineering, and infrastructure projects.

Highways Services

Kier Group plc offers highways services, including road maintenance, highway design, and traffic management.

Property Development

Kier Group plc develops and invests in commercial and residential properties, including offices, retail spaces, and housing.

Infrastructure Services

Kier Group plc provides infrastructure services, including utilities, transportation, and energy infrastructure projects.

Environmental Services

Kier Group plc offers environmental services, including waste management, recycling, and environmental consulting.

Housing Maintenance

Kier Group plc provides housing maintenance services, including repairs, maintenance, and refurbishment of social housing.

8. Kier Group plc's Porter Forces

Forces Ranking

Threat Of Substitutes

Kier Group plc operates in the construction industry, which has a moderate threat of substitutes. While there are alternative materials and construction methods, they are not easily substitutable, and the industry is characterized by a high degree of customization.

Bargaining Power Of Customers

Kier Group plc's customers, primarily government agencies and private developers, have limited bargaining power due to the company's strong market position and the complexity of construction projects.

Bargaining Power Of Suppliers

Kier Group plc's suppliers, including material providers and subcontractors, have a moderate level of bargaining power due to the company's dependence on them for raw materials and specialized labor.

Threat Of New Entrants

The construction industry has high barriers to entry, including significant capital requirements, regulatory hurdles, and the need for specialized expertise, making it difficult for new entrants to compete with established players like Kier Group plc.

Intensity Of Rivalry

The construction industry is highly competitive, with many established players competing for a limited number of projects, leading to intense rivalry among companies like Kier Group plc.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 40.90%
Debt Cost 7.95%
Equity Weight 59.10%
Equity Cost 7.95%
WACC 7.95%
Leverage 69.21%

11. Quality Control: Kier Group plc passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
San José

A-Score: 6.4/10

Value: 7.8

Growth: 7.2

Quality: 5.4

Yield: 3.1

Momentum: 8.5

Volatility: 6.3

1-Year Total Return ->

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Peab

A-Score: 5.7/10

Value: 7.1

Growth: 5.2

Quality: 3.5

Yield: 7.5

Momentum: 4.0

Volatility: 7.0

1-Year Total Return ->

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Stock-Card
Hill & Smith

A-Score: 5.5/10

Value: 3.8

Growth: 6.7

Quality: 7.0

Yield: 3.8

Momentum: 5.5

Volatility: 6.3

1-Year Total Return ->

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Stock-Card
Kier

A-Score: 5.3/10

Value: 7.1

Growth: 4.9

Quality: 3.8

Yield: 1.9

Momentum: 9.5

Volatility: 4.7

1-Year Total Return ->

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Costain

A-Score: 5.0/10

Value: 6.3

Growth: 4.4

Quality: 5.5

Yield: 2.5

Momentum: 8.0

Volatility: 3.0

1-Year Total Return ->

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Stock-Card
Severfield

A-Score: 4.3/10

Value: 10.0

Growth: 2.8

Quality: 4.6

Yield: 7.5

Momentum: 0.0

Volatility: 0.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

2.2$

Current Price

2.2$

Potential

-0.00%

Expected Cash-Flows