Kier delivered results ahead of our forecasts, driven by Infrastructure Services top-line growth and Construction margin expansion. Property operating profit nearly doubled as capital employed increased to £198m and ROCE reached 6.7%, progressing towards the 15% target that underpins the Group's margin enhancement strategy to reach 4.0-4.5%. Margins across Construction and Infrastructure reflect the quality of the business mix, with high exposure to target cost and cost reimbursable contracts reducing execution risk. The order book grew £0.2bn to £11.0bn with 91% of FY26 revenue secured, whilst continued deleveraging saw average month-end net debt substantially improve to £49.2m from £116.1m. We introduce FY28 forecasts highlighting anticipated top-line acceleration as larger Water AMP8 contracts materialise, with profit growth strengthening as Property approaches its capital and returns targets. Capital allocation discipline was evident through the 38% dividend increase and £20m share buyback programme, alongside a 22% increase in net cash to £204m. We upgrade our target price to 277p, reflecting an uplift to our DCF resulting from continued low-risk delivery in Construction/Infrastructure and Property momentum.
