Kier's 1H25 trading update confirms performance in line with Board expectations, with over 95% of FY25 revenue secured and the order book growing 2% since June 2024 to £11bn. Recent contract wins demonstrate momentum across key verticals, including an £850m Yorkshire Water framework, a £240m MOD accommodation contract, and positions on NHS decarbonisation and public sector facilities management frameworks. Strong free cash flow is accelerating the Group's capital allocation strategy: 1) deleveraging, with average month-end net debt improving to £38m (1H24: £136.5m), on track to deliver our month-end net cash forecast in FY26E; and 2) the announcement of a £20m share buyback programme to drive shareholder returns and reflecting management's confidence in the outlook. ISG's recent collapse continues to present opportunities to gain market share, particularly in Prisons, where Kier is one of three Tier 1 contractors, as well as in Education and Healthcare. Half-year results will be published on 11 March 2025.
