Kier on track as George Osborne commits to Crossrail 2

Completion of the project is more than a decade off

Kier chief executive Haydn Mursell welcomed the Crossrail decision (Bloomberg)

The building company Kier is looking to cash in on the Government’s big infrastructure deals as its chief executive Haydn Mursell welcomed George Osborne’s commitment to press ahead with Crossrail 2.

Kier has been a big player in the first Crossrail scheme and hopes to be involved when the spades go into the ground for Crossrail 2 in the years ahead.

The Chancellor announced £80m in funding for the development of the north-south London link, and although completion of the project is more than a decade off, Kier could be involved at an earlier stage via its recently acquired consulting business Mouchel.

Before then, Kier has pre-qualified for enabling works packages on the HS2 rail project – worth £200m each – and will potentially be in the running for the three main construction contracts, potentially worth £1bn apiece.

Mr Mursell said: “I’m always pleased when the Government states its commitment to the sector; the fact that momentum is there is good for us.”

Revenues at Kier jumped 32 per cent to £2.1bn in the six months to December, thanks to the Mouchel deal, while underlying operating profits rose 27 per cent to £57.1m. Taking into account the £16m costs of acquiring and integrating Mouchel, pre-tax profits fell by 35 per cent to £18m.

The £265m acquisition was funded by £340m rights issue last year, but the company expects eventually to make £10m a year in synergies from the deal. The interim dividend was raised by 12 per cent to 21.5p.