Kier Group - strong first half points to share rise, now 233p, TP 277p

Mark Watson-Mitchell - 03.03.2026

This morning's Interim results from the Kier Group (LON:KIE) reported a strong first half to end-December 2025, achieving an average net cash position of £16.8m, a significant improvement from the prior period's net debt of £(37.6) million.

The group also announced a new £25m share buyback programme.

Revenue grew by 2.6% to £2,029m, with adjusted operating profit increasing by 6.6% to £71.0m, and the adjusted operating margin improved by 10 basis points to 3.5%.

The company's order book reached a record £11.6bn, and full-year expectations remain unchanged, with the group trading well and confident in driving further stakeholder returns.

The Business

Kier is a leading UK infrastructure services, construction and property group.

It claims that its purpose is to sustainably deliver infrastructure which is vital to the UK, and is committed to leaving lasting legacies through its work.

The group provides specialist design and build capabilities and the knowledge, skills and intellectual capital of its people to ensure that it is able to project manage and integrate all aspects of a project.

Management Comment

CEO Stuart Togwell stated that:

"We have delivered a strong first half, with good growth in both revenue and profits, reaching an average net cash position for the first time in 13 years, a significant milestone for the Group.

These results reflect the strength of our customer relationships, the quality of our teams and our operational excellence.

Underpinned by our robust cash generation, we are pleased to announce an increase in the interim dividend, in line with earnings, and a further £25m share buyback programme.

Our order book has grown to a record £11.6bn and we have seen this momentum continue into the second half with a number of appointments to frameworks in key sectors of health, education, water and roads, with further clear opportunities ahead in energy and defence.

This underpins the confidence we have in our ability to shape the future of infrastructure, supporting the delivery of the UK Government's 10-year pipeline of investment.

Across the Group, there is real energy and optimism supported by the recent steps we have taken to optimise our structure and leadership capability, to maximise the opportunities ahead and ensure we are poised for further sustainable growth.

Following our strong first half performance, the Group continues to trade well with full year performance forecast to be in line with the Board's expectations.

With a growing, high quality order book, expert project delivery, robust cash generation and disciplined use of capital, we remain confident in driving further returns for our stakeholders."

The Equity

There are some 452.87m shares in issue.

The larger holders include Oasis Management (6.00%), UBS Asset Management (5.63%), Brewin Dolphin (5.11%), Charles Stanley Investment Management (5.10%), Lombard Odier Asset Management (5.08%), JO Hambro Capital Management (5.05), Rathbones Investment Management (5.03%), Schroder Investment Management (4.99%), Jupiter Investment Management (4.87%) and Aviva Investors Global Services (4.86%).

Broker's View

Analyst Max Hayes, at Cavendish Capital Markets, has a 277p Target Price on the group's shares.

He stated that:

"Kier's share price has risen 57% over the past 12 months, underpinned by a cadence of strong trading that combines exposure to high-growth verticals with low-risk strategy execution.

On a blended EV/EBIT of 8.7x across FY26E and FY27E, the Group continues to trade at a discount to the sector average of 10.3x.

We believe continuing its track record of low-risk delivery in-line with mid-term targets should drive further re-rating, with additional support from any broader sector re-rating."

For the current year to end-June Hayes goes for revenues of £4,273.2m (£4,087.8m), with adjusted pre-tax profits of £142.5m (£132.4m), earnings of 23.1p (20.5p) and paying a dividend of 8.1p (7.2p) per share.

The 2027 year could see £4,415.9m revenues, £149.9m profits, 24.4p earnings and an 8.6p dividend.

My View

These shares, now at 233p, are undervalued and very capable of a further rise.

(Profile 24.06.22 @ 71p set a Target Price of 90p*)

(Profile 20.05.24 @ 146.8p set a Target Price of 177p*)

(Profile 09.01.26 @ 223p set a Target Price of 270p)