Kier Group puts £32m into staff pension fund

Kier’s cash generation is so strong that even after ploughing £32m into its pension fund, there was an inflow of £53m during the latest financial year.

As a result, the group’s net cash balance has risen to £110m. John Dodds, chief executive, puts this down to “excellent cash management in the construction and support services divisions and the timing of land expenditure within the homes division”.

Kier’s financial results (12 month to 30 June) show turnover higher at £1.8bn (£1.6bn) and pre-tax profit stronger at £59m (£55m).

Dodds said: “The group has a well-established business model. The construction activities generate cash, albeit at low operating margins, while housebuilding and property require cash for growth but generate higher operating margins. We have created an efficient financial model.”

Twelve months ago, Kier made the ground-breaking promise to its staff that a huge effort would be made to restore the pension fund to fully-funded status.

That promise has now been delivered. Thanks largely to the £32m one-off payment, the fund’s deficit has been trimmed to £42m (£85m). The money was paid across in the final quarter of the financial year. A further £5m has been paid in during July.