Kier Group plc

FY26 revenue was GBP 4.4 billion, up 7.5% year over year. Adjusted operating profit was GBP 170 million, up 6.7%, with an adjusted operating margin of 3.9%; adjusted EPS rose 8.8%. The company generated GBP 206 million of operating free cash flow and GBP 165 million of free cash flow, and ended the year with closing cash of GBP 232 million. Average month-end net cash was GBP 11 million, compared with an average net debt position in FY25. For FY27, management said adjusted EPS is expected to be at the top end of the Board’s prior expectations. Medium term, Kier targets mid-single-digit annual revenue growth, a 4% to 4.5% adjusted operating margin, double-digit EPS CAGR, and more than GBP 200 million of average net cash by FY29.

Stuart Togwell said the business has moved from recovery to value creation and is now positioned for consistent, sustainable growth. His key message was that Kier is simplifying around core infrastructure and construction, backed by strong framework access, long-term customer relationships, and a disciplined approach to risk. He also framed the property decision as a capital reallocation move that strengthens the balance sheet and reduces volatility, while expressing confidence in the group’s ability to deliver the new strategy.

Thomas Hinton emphasized the quality of the FY26 results: GBP 4.4 billion of revenue, GBP 170 million of adjusted operating profit, 3.9% margin, and GBP 165 million of free cash flow. He highlighted cash conversion of 121%, operating free cash flow of GBP 106 million, and closing cash of GBP 232 million, plus shareholder returns through a 5.2p final dividend, 7.8p full-year dividend, and ongoing share buybacks. On the outlook side, he pointed to the record GBP 11.9 billion order book, 95% cover for the next financial year, and guidance that FY27 adjusted EPS should land at the top end of expectations; he also said the company expects more than GBP 200 million of average net cash by FY29 and will prioritize balance-sheet strength, dividends, and then buybacks or selective acquisitions.

Analysts focused on the timing and size of future buybacks, bond repayment timing, the strength of water margins, resourcing constraints in water, visibility into FY29, and the rationale for the GBP 200 million net cash target. Management said buyback pace will depend on the speed of cash coming in from the core business and the property runoff, and they did not plan a large one-off buyback; they also said the 9% coupon bond would not be repaid early and that March 2028 is the logical repayment point. On margins and water, management said water is a strong margin business but not something to extrapolate as uniquely high relative to infrastructure overall, and said supply-chain risks are being managed through contract structure, local relationships, and selective sector exposure. On visibility, they said FY28 revenue cover is about 70% and FY29 around the low-50s percentage range, with a broader pipeline supporting longer-term growth.