Construction and civil engineering Kier Group has announced an 11% increase in pre-tax profits with the publication of its preliminary financial results for the year to 30 June 2010. Financial analysts had expected pre-tax profits to be around £55.5 million, but Kier achieved a better than expected £58.4m for the 12-month period.

With an annual revenue in excess of £2.1billion, the Group employs over 11,000 people worldwide. Kier currently has a record net cash position at £175.2m (2009: £92.5m). The Group has also maintained its construction margins maintained at 2.6% (2009: 2.6%), while Support Services margins improved to 4.5% (2009: 4.1%). The Group described its cash performance, one of its key measures, as “exceptionally strong”, particularly within the Construction businesses, with £111.4m generated from operating activities during the year.

The firm also reported strong order books for Construction and Support Services at £4.2bn (2009: £4.5bn), together with a strong pipeline of further opportunities.

Commenting on the results, Paul Sheffield, Chief Executive said:

“The year to 30 June 2010 has been another successful one for the Group. Underlying profit before tax is ahead of last year, revenues are at similar levels to last year and cash generation has been very strong, closing the year at a record balance.

“Kier continues to benefit from its established client relationships and financial strength and is well placed to attract work through its wide network of local offices and the numerous frameworks in which it is involved.

Our construction order books of secure and probable contracts remain robust, much of it won through framework agreements, providing confidence that we can sustain healthy operating margins and strong cash flows.

Our integrated business model provides us with unique opportunities drawing on the strength of our relationships with public and private sector clients and this has proved to be very resilient during the global economic slowdown. We are also encouraged by the prospects we see in markets such as power, utilities, waste and mixed-use regeneration schemes and overseas.

“We have a strong balance sheet, a good track record of service delivery and very talented, capable staff, all of which give us confidence that the Group will make further progress in the new financial year.”

In a statement, the firm said that while market conditions in 2011 would remain challenging for all its businesses, its strong track record of delivery and innovative financing and planning skills, meant it expects to continue to grow its UK market share, particularly in Construction and Support Services.

In the water sector, as part of a joint venture, 2010 has seen an extension to Kier’s framework with United Utilities under AMP5, to which approximately £400m of work has been allocated in the five years to 2015. In addition, outside the framework, Kier was successful in winning Preston UID which, at £72m, is the largest single contract let by United Utilities this year.