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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 Strong H1 Performance and Growth Prospects

Kier Group delivered a robust first half of 2026, with revenue growing 2.6% to GBP 2.029 billion and adjusted operating profit increasing 6.6% to GBP 71 million. The company's earnings per share (EPS) came in at 0.07692, below analyst estimates of 0.13. The order book stood at a record GBP 11.6 billion, providing 94% coverage of this year's revenue and 78% of next year's forecast revenue. The company's net cash position improved significantly to GBP 103 million from GBP 58 million at December 2024.

Publication Date: Mar -08

📋 Highlights
  • Revenue and Profit Growth:: Revenue increased by 2.6% to £2.029 billion, with adjusted operating profit rising 6.6% to £71 million.
  • Record Order Book:: Order book hit £11.6 billion, covering 94% of 2026 revenue and 78% of 2027 forecasts, up 5% year-on-year.
  • Strong Liquidity Position:: Net cash surged to £103 million (vs. £58 million in Dec 2024), with a 13-year high average net cash of £16.8 million.
  • Shareholder Returns Boost:: Interim dividend rose 30% to 2.6p/share, alongside a £25 million share buyback program.
  • Framework Secures Future Projects:: Won £15 billion CF25 education framework and £37 billion hospital program, enhancing pipeline visibility.

Operational Highlights and Division Performance

The Infrastructure Services division reported an order book of GBP 7.1 billion, up 6%, while the Construction segment delivered GBP 920 million of revenue. The Property division is on track to achieve a return on capital employed (ROCE) target of 15% by 2028. Kier Places, representing 15% of 2026 revenue, continues to provide long-term facilities management and housing maintenance services. The company's 360 approach enables it to leverage capabilities across the project life cycle, driving customer benefits and reinforcing its position as a trusted industry partner.

Growth Opportunities and Pipeline Visibility

Kier Group has a strong pipeline visibility, with opportunities to convert frameworks to projects in health, education, and defense. The company has secured a place on the Department for Education's (DfE) new £15 billion CF25 framework and a £37 billion new hospital program 2.0 Alliance framework. Stuart Togwell, Kier's Chief Executive, highlighted the company's ability to pivot at scale and deliver sustainable growth through social and economic infrastructure vital to the UK.

Valuation and Financial Metrics

With a P/E Ratio of 15.5 and an EV/EBITDA of 5.53, Kier's valuation appears reasonable. The company's Dividend Yield stands at 3.34%, and its Free Cash Flow Yield is 23.77%. The ROIC is 5.43%, and ROE is 11.69%. Analysts estimate next year's revenue growth at 3.0%, indicating a stable outlook for the company.

Capital Allocation and Shareholder Returns

Kier has announced a new share buyback program of GBP 25 million and increased its interim dividend to 2.6p per share. The company's net cash position and average net cash balance have improved, reducing concerns about its financial position and supporting access to frameworks and pipeline growth.

Outlook and Medium-Term Targets

Kier Group remains confident in its ability to deliver sustainable growth, with a medium-term financial target of revenue growth above GDP, an adjusted operating margin of 4-4.5%, and a cash flow conversion of around 90%. The company is trading in line with Board expectations, and the full-year expectations remain unchanged. The optimal balance sheet structure is expected to be strengthened, with a plan to keep it positive and continue to build.

3. NewsRoom

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Is Kier Group plc (LON:KIE) Expensive For A Reason? A Look At Its Intrinsic Value

Dec -09

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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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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: 6.3/10

Value: 6.8

Growth: 7.2

Quality: 5.1

Yield: 3.1

Momentum: 9.0

Volatility: 6.3

1-Year Total Return ->

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Stock-Card
Peab

A-Score: 5.7/10

Value: 7.1

Growth: 5.2

Quality: 3.8

Yield: 7.5

Momentum: 3.5

Volatility: 7.0

1-Year Total Return ->

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Stock-Card
Hill & Smith

A-Score: 5.5/10

Value: 3.7

Growth: 6.7

Quality: 7.1

Yield: 3.8

Momentum: 5.0

Volatility: 6.7

1-Year Total Return ->

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Stock-Card
Kier

A-Score: 5.4/10

Value: 7.1

Growth: 4.9

Quality: 3.9

Yield: 3.1

Momentum: 8.5

Volatility: 5.0

1-Year Total Return ->

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Stock-Card
Costain

A-Score: 5.1/10

Value: 6.1

Growth: 4.4

Quality: 5.5

Yield: 2.5

Momentum: 8.5

Volatility: 3.3

1-Year Total Return ->

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Stock-Card
Severfield

A-Score: 4.1/10

Value: 9.3

Growth: 2.8

Quality: 3.7

Yield: 7.5

Momentum: 0.5

Volatility: 1.0

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

2.21$

Current Price

2.21$

Potential

-0.00%

Expected Cash-Flows