Operational review

Infrastructure Services comprises the Transportation and Natural Resources, Nuclear & Networks businesses. Revenue increased 7% against the prior year reflecting the continued acceleration of HS2 works together with growth in the water and nuclear sectors.

Adjusted operating profit reduced by 1% to £111.0m (FY24: £112.3m) reflecting the benefit of a one-off £6m customer claim in the prior year, excluding which underlying growth would be 4%. Adjusting items include the amortisation of contract rights from the Buckingham and other acquisitions.

The Transportation business division undertakes design, build and maintenance of assets primarily in the road, rail and aviation sectors.

The business benefited from the start of several contracts won in previous periods and the continued successful delivery of works for HS2. This has been partly offset by anticipated delays in finalising the new phase of the Road Investment Strategy (RIS3) as well as a later than anticipated start to work under Control Period 7 (CP7) for our rail business.

The Natural Resources, Nuclear & Networks division delivers long-term contracts in maintenance and capital projects to the water, nuclear and energy sectors as well as the protection of habitats and communities in our natural environment and waterways. The business is well-positioned to benefit from the increase in opportunities from the new water spending cycle (AMP8) as well as growth in the environment and energy sectors.

During the period we saw marked revenue growth in water and nuclear, as we start to fulfil projects delivered under these new spending cycles.

Currently, the Group is working with a total of 9 customers through 17 frameworks with an advertised value of up to £15bn. In addition to the Government’s £104bn long-term commitment to the AMP8 investment programme, the Group is seeing opportunities to grow market share by broadening support for natural water management.

Revenue increased by

7%

Adjusted operating profit reduced to

£111.0m

(FY24: £112.3m)

Key contract wins include:

Natural Resources, Nuclear & Networks:

• Secured our first contracts on Southern Water’s AMP8 framework, working on clean and waste water schemes, totalling c.£45m
• 87% of revenue secured for FY26

The Construction segment comprises both regional and large scale strategic projects, together with property management services (Kier Places). The business delivers schools, hospitals, prisons and defence estate optimisation, as well as commercial, residential and heritage buildings for local authorities, the Ministry of Justice, other government departments, and the private sector.

Revenue remained in line with the prior year overall, with growth from both regional and strategic projects such as the successful hand over of HMP Millsike during FY25 offsetting the exit of some lower margin contracts within Kier Places. Work also commenced on the HMP Glasgow project towards the end of FY25 with full activity levels anticipated to be reached in the second half of FY26.

Adjusted operating profit increased 8% to £75m driven by the improved business mix, including the Kier Places contract management mentioned above. Adjusting items include £17m relating to fire and cladding compliance costs.

As a regional Tier 1 contractor, we continue to be well placed to benefit from the UK Government’s focus on spending to improve under-invested assets such as schools, hospitals and custodial services, where our Construction business has specialist expertise.

Adjusted operating profit increased by

8%

Key contract wins include:

• Awarded a more than £100m contract to deliver additional prison places at HMP Northumberland, as part of the Small Secure Houseblocks (SSHP) Alliance for the Ministry of Justice (MoJ)
• Education – awarded four projects worth c.£210m
• Kier Places – appointed by Wiltshire Council to their five-year Facilities Management contract worth £3.4m p.a.
• 95% of revenue secured for FY26

The Property business invests in and develops mixed-use commercial and residential schemes across the UK, largely through joint ventures. For FY25, Property generated revenue of £38.4m (FY24: £71.0m) reflecting a large one-off asset sale (Southampton) in the prior year, as well as a higher proportion of land (vs. building) sales overall. In FY25 Property transaction volumes grew to nine (from five in the prior year), driving the growth in adjusted operating profit to £12m (FY24: £6m).

The Group is focused on the disciplined expansion of the Property business through select investments and strategic joint ventures, targeting a consistent ROCE of 15% by 2028. As at 30 June 2025, the capital employed in the Property segment was £198m excluding third-party debt and fair value gains. We expect to increase the average capital employed towards £225m, while reinvesting to deliver more consistent returns over the medium term. The ROCE result for FY25 demonstrates modest but steady progress, particularly in the second half of the year, towards the targeted level of returns as the property portfolio continues to season and overall capital employed approaches more optimal levels.

Property generated revenue of

£38.4m

(FY24: £71.0m)

Adjusted operating profit increased to

£12m 

(FY24: £6m)

Key contract wins include:

• Planning secured for:
  • Six Trade City industrial units at Maple Cross
  • 55 homes in Saffron Walden under the Vistry Joint Venture
• Construction phase:
  • Eleven Trade City units at Bognor Regis
  • Ten Trade City units at St Albans
• Acquired a four-acre site at Sharston, Manchester
• Further development at Watford with development starting on new Town Square, Riverwell Square