Kier Group announces solid full-year results to 30 June 2018. This is underpinned by a consistent performance from its private housebuilding arm Kier Living which generated a revenue of £175m, with the business’ total revenue £374m. The total operating profit increased 14% to £25.9m and it achieved a 15% ROCE, two years ahead of its Vision 2020 financial target.
Demand for new housing remains high with Kier Living sales continuing to be strong, especially in the second part of the year. On average for 2017/18, approximately 0.7 units sold per week per trading site. In total, Kier Living completed 749 private units over the year.
With an average house price of c £240,000 Kier Living is providing housing solutions for many buyers, with the Help to Buy scheme assisting c.50% of all its sales.
In June 2018, Kier Living announced a joint venture with Homes England and Cross Keys Homes to facilitate increased housebuilding through capital efficient structures to deliver housing in areas of the country with the greatest need. The aspiration is to deliver 5,400 units, with a mix of tenure, over the next ten years. Each site has a Virtual World Plaque™ installed as it looks to address the skills shortage facing the sector. These physical markers, alongside online and social content and a schools’ outreach programme form part of the award-winning Shaping Your World™ skills campaign that is inspiring 11-15-year olds to consider a role within the built environment.
Commenting on the full-year results, John Anderson, executive director of Kier Living, said: “I am pleased with another set of solid full-year results for our residential business which has seen volume remain on track while increasing our operating profit 14% to £25.9m. We have achieved ROCE of 15%, one of the key financial objectives in our Vision 2020, two years ahead of schedule. We will continue to adapt to market demands and provide innovative solutions to accelerate the housing stock this country desperately needs.
“The recent Oliver Letwin report suggested we need an extra 15,000 brick layers to build the 300,000 houses needed per annum. Kier Living is proactively addressing the skills shortage faced by the industry by engaging with the next generation of talent. We are a signatory of the HBF Skills Partnership which aims to encourage young people to see house building as a viable career option and to train in core key skills. We are also using our own Shaping Your World™ campaign to showcase the breadth of roles available in order to create a diverse workforce that will deliver new housing in the coming years.
“In parallel with addressing the skills shortage we are also continuing to focus on the importance of our relationship with our customers. We have invested £3m in upgrading a front-end customer relations software platform to provide the highest levels of service and communication to our customers and look forward to continuing to deliver houses of high quality and design that people are proud to call home.”
Estelle Palmer is an apprentice groundworker with Kier Living at its Oakbrook development which is part of the Homes England and Cross Keys Homes joint venture that has pledged three apprenticeship placements at each of its sites. Estelle comments on her first six months working in the housebuilding industry: “I would absolutely recommend this industry to anyone struggling to decide what to do as a career. There is a huge demand for new housing across the country, opportunities are ripe, and you can enter the industry in various ways, from apprenticeships to graduate programmes. I may have only been working in the industry for the last six months, but it already feels like home.”
Kier Living also launched two new regions, Wales & West of England and Southern to bolster its overall position to deliver new housing and continued to look for and invest in innovative solutions to housebuilding, including working with its supply chain to utilise modern methods of construction (MMC).