Kier Group plc (KIE) Earnings Call Transcript & Summary

Right. So good afternoon, everyone. And welcome to Kier Group plc's Capital Markets Day. And it's fantastic to see so many of you here in person. I'm Andrew Davies, Chief Executive of Kier Group, and I'm joined by Simon Kesterton over there, our Chief Financial Officer; as well as our senior leadership team. A little bit of housekeeping, if I may. Firstly, there are no fire drills planned today. So if the alarm does go off, please do assume that it's real. And the escape routes are that way, as you can see the green sign and that way, as you can see on that green side. So please leave by the stairs and convene outside by the church at the front of the building. That's the fire instructions. So let's get started. I'm delighted to be able to host this session today and talk to you about our strategy, our vision and the progress the group has made. We're here to give you a deeper understanding of our business, our performance and most importantly, our road map for sustainable growth through 2030 and beyond. So we know your time is valuable, and we're keen to make sure that this is -- session is insightful and worthwhile for you. And you'll hear directly from our leaders, who will bring to life our markets, our operational strengths and capabilities and is your chance to please do ask them questions. So before I go on, it really is great to be able to stand here today as Chief Executive of Kier with my executive team, who have worked tirelessly to delever this company, refinance it and focus it for growth with an GBP 11 billion order book. Kier has always mattered and collectively, we've steered the group to a position where it can confidently set our ambitious plans, which will deliver for clients, employees and shareholders. So let's introduce the team here today and it's a real privilege to work with such an experienced leadership team focused on delivering our sustainable growth plan. They'll introduce themselves individually throughout the day, as I said, as well as on the individual stands when you visit them later. And without giving too much away, you'll also hear from them how by working together through our integrated 360 approach, Kier delivers much more than just the sum of its parts. Today's agenda, after hearing from Simon after I finish, you'll have the opportunity to rotate around our 5 stands. On stand 1, we have construction down that end, which be hosted by Stuart. Stand 2 is transportation, the next one down. Stand 3 is natural resources, nuclear networks. Stand 4 is property. And stand 5, just behind property, you'll hear about our sustainable growth model. If you look at our objectives for today, we'll outline our investment case and explain why we believe Kier is a compelling investment proposition as well as why we're excited about our future and confident of delivery of our sustainable growth plan. Key to this is the strength of the executive team who will deliver the plan. We want you to leave today with an appreciation of how Kier's proposition, its complementary capabilities and operational strength underpinned by our integrated 360 approach supports those ambitions. So first, I want to give you the very latest update on our current trading. As you may have seen that we issued a trading update this morning ahead of today's Capital Markets Day. And I'm pleased to confirm that Kier's performed well over the last 4 months through to 30th of April 2025, and we're trading in line with expectations. In terms of order book at 30th of April this year, it stood at circa GBP 11 billion, that's 2% increase compared with the 30th of June 2024, meaning that the group has already secured over 80% of its FY '26 revenue. We continue to win work across all of our divisions and chosen markets. Within infrastructure services, both natural resources, nuclear networks and transportation have won extensions to contracts, reflecting our operational performance, including a 5-year renewal of the Anglian IOS alliance worth up to GBP 400 million in NRNN and a 1-year extension by Shropshire County Counsel of the maintenance of their local highways. Within construction, we've been appointed under PCA by the University of Warwick to design and build STEM facilities. Our strength within the education sector is reflected in us winning 2 education projects worth GBP 180 million for the group in the last 6 months. Our Property division in joint venture with Network Rail has just secured planning permission for its GBP 200 million Bishop's Stortford Station redevelopment. And finally, such as the confidence in the delivery of our business divisions individually and collectively, including the increased investment in our property business, that we are now targeting a 4% to 4.5% adjusted operating profit percentage. Let's just talk about who we are. For those of you who are new to Kier. We thought we'd summarize briefly who we are as well as giving you a few key metrics on the business. So in short, we are a provider of infrastructure services, construction and property developments and a leading strategic supplier to His Majesty's government with almost 100 years of experience. Through our projects, we have a footprint across every stage of a project life cycle and capabilities, which range from design, project management, commercial, supply chain and build to people and resource management. Our business model is straightforward. We have 4 business divisions, and you'll learn more about them when you visit each stand. As a group, our enhanced returns are driven by our ability to deploy the free cash generated by the construction, natural resources, nuclear networks and transportation businesses into our property business, which then invest this money in a disciplined manner to generate superior returns. The Property business utilizes the synergies that it holds with the other 3 operating divisions to provide enhanced cash returns back to the rest of the group for further investments or return to shareholders. And this is a very deliberate strategy that we choose instead of holding the cash on our balance sheet, which we believe is a different approach to that taken elsewhere in the market, and Simon will talk more to that later. So let's turn to our investment case. As we move through today's session, you'll see how our strategy and capabilities support our investment case as is set out on this slide. In short, we will create value in the medium term for our shareholders through the powerful combination of our business model, our attractive market positions and our strong order book, all executed by the experienced management team. Central to our investment case is a business that generates sustainable and strong shareholder returns. And supporting the investment case is our strategic framework or our house, as we call it. It clarifies our strategy, and that's the dark blue bit or the roof of the top as well as setting out the actions that underpin this strategy and their key enablers. Our strategy has not changed significantly since it was originally created in 2019. Some of these strategic actions have evolved over time, but fundamentally, the strategy is a strong one, and it works for us. In summary, we're focused on U.K. government where we're the largest supply of construction and infrastructure services to the government, the regulated and blue-chip private client base with 90% of our revenue coming from public and regulated customers. We operate in the business-to-business market, and we contract through long-term frameworks. Our actions to support this strategy are threefold: disciplined sustainable growth, consistent and safe delivery and strong cash generation. Our business divisions and our core competencies are all aligned to these strategic actions. And hopefully, you can now see how this strategic framework supports our investment case that was set out earlier. In short, we're operating in markets where government is prioritizing spend. Kier is uniquely a national contractor with a regional footprint from Aberdeen to Penzance. And it is this footprint that we feel differentiates us. We have nationwide reach and capability, but critically, we execute locally, which means that we have tried and tested local partners and particularly for local clients is attractive as we're investing directly and for the long term in local economic areas. At any given time, we typically have over 400 contracts, predominantly with central government and local authorities. Our business is supported by around 10,000 employees and more than 16,000 supply chain partners. Kier matters not only to the U.K. government and economy, but also to the communities in which we operate as illustrated on this slide. And just to give you a little bit of additional context. So let's look more closely at a few highlights of the impact we deliver for our customers and the communities in which we work. As our purpose states, Kier sustainably delivers infrastructure that's vital to the U.K. We're committed to leaving lasting legacies through our work, and you can see here a few statistics demonstrating this. From delivering the central section of HS2, building schools or providing second chances to prison levers, it's clear why we are a preferred choice of supply to government. Sustainability remains at the core to our purpose with, for example, 69% of our revenue classified as originating from green products or services. And we also make a choice to spend significantly with small local businesses throughout our projects. At the core of our ability to grow this business and drive shareholder returns is our integrated 360 approach, which delivers significant synergies across our business. Our model is to decentralize our business as appropriate, but to use our combined strengths to leverage specific capabilities to drive synergies. As an example, our business often service common customers, so we're able to provide them with multilayered solutions from a single source. Then we're able to use our size, scale and order book to achieve combined purchasing power. A focus on ESG is central to our relationship with the U.K. government. As you'll hear later from Louisa, this is embedded across all of our activities. Back-office functions such as invoice processing and people functions are delivered with maximum efficiency by our shared services. And finally, our scale brings significant commercial synergies and efficiencies, which deliver real financial benefits for our clients and our shareholders. So we just look at the context in which we're operating at the moment. And we look ahead, the macro environment presents both challenges and opportunities that we must be ready to meet with clarity and purpose. Economic and political factors are creating more supportive environment for growth, and we're seeing renewed focus on domestic investment, particularly in the energy security and U.K.'s net zero commitments. These are not just policy shifts, they are signals of long-term transformation that align with our strategic ambitions. Demographic trends, especially longevity and net migration are placing increasing pressure on our health, social care and housing systems. And this isn't a future issue, it's a present reality that demands innovative, scalable solutions. And historically, construction has been a lever to stimulate the economy during periods of weak growth and today is no different. With the population growth driving demand across roads, rail and airports, we have a critical role to play in shaping the U.K.'s infrastructure for the next generation. We also recognize the persistent efforts to regenerate and invest in underserved regions and are well positioned because of our geographical spread to contribute meaningfully to that agenda. Lastly, climate change and aging asset base are also accelerating the need for maintenance and upgrade programs. Environmental regulations are tightening and rightly so. And this is our moment to lead not just to comply with sustainable forward-thinking solutions. So in short, we're operating in the landscape of the macro environment defined by population growth, economic ambition and environmental urgency. And it's a landscape that demands bold thinking, working in partnership with our customers and a deep sense of responsibility and purpose. As you can see from this slide, our businesses are well aligned with the U.K. government's priorities. So this slide summarizes the government's agenda and sets out how Kier is particularly well placed to meet it, whether it's driving economic growth, addressing the housing shortage, renewing the NHS and topically investing in U.K. defense readiness or reversing historic underinvestment in U.K. infrastructure, our scale, expertise, regional footprint and importantly, our positions on the appropriate frameworks mean that Kier is extremely well positioned to provide these solutions. Looking at the agenda of the U.K. government and the regulated industries in more detail. From the outset, the government has been clear that it sees investment in infrastructure as a key driver of economic growth and is currently consulting on its 10-year infrastructure strategy ahead of publication in the coming weeks, when it will also announce its 3-year spending review. We'll find out the details soon. But ahead of that, there are a number of investment commitments that are already made, that Kier can and already is benefiting from. As an example, the significantly increased investment in water infrastructure, the AMP8 program will provide significant growth opportunities. We're already 1 of the largest Tier 1 players in U.K. water sector and have been awarded places on 15 frameworks supporting 9 regional authorities worth circa GBP 15 billion in total. Other sizable government initiatives that map closely to our operations include a GBP 43 billion investment in rail under CP7 as well as continued support for HS2. Road spending covering both national and regional highway maintenance is worth over GBP 12 billion has also been announced. Our Construction business also has a sizable range of opportunities open to it. Again, our own market focus is well aligned to the government's priorities. Within education, the Department of Education has launched a 6-year Construction Framework 25 or CF25 worth up to GBP 15.4 billion, which is to start from January 2026 to build and refurbish education establishments across England as well as the additional educational requirements to support the planned delivery of 1.5 million new homes. And there is a new hospitals program worth an estimated GBP 3 billion per annum. So as you'll see, Kier has a strong record of delivering prisons in prison places and with us well placed to benefit from the announced maintenance program with the capability also to contribute to the scheme to extend prison places. The political need to increase defense spending will also benefit Kier, while we have already won places on the GBP 5 billion DOP framework and have been chosen to deliver 16,000 new single living accommodation for the armed forces. And our Kier Places business is well placed to benefit from the capital and maintenance opportunities from the extension of the country's social housing stock. And lastly, in terms of the national program for river regeneration, there are clear opportunities you'll see for our property business to thrive. So for my final slide, I'd like to quantify you the scale of the addressable opportunity in our core markets in terms of annual investment. We estimate that our addressable market is around GBP 64 billion in total of which GBP 29 billion relates to Infrastructure Services and GBP 35 billion to construction. This opportunity is underpinned by our position on government's framework agreements through which public spending is governed. And as we stand, we won positions worth up to GBP 158 billion in total on these frameworks, which traditionally account for around about 60% of our revenue. So at this point, I'm pleased to hand over to Simon, who will look in more detail on our long-term sustainable growth plan and its foundations, including more on those framework positions.

Thank you, Andrew. And good afternoon, everyone. It's great to see you all here today, and we appreciate you taking the time to join us at this great location. For those of you I haven't met yet, I'm Simon Kesterton, CFO of Kier. I'd like to begin by providing you with an overview of our evolved long-term sustainable growth plan, which summarizes the direction and ambition of the group. For those of you who are familiar with this plan, you will have already noticed our increased margin target, but I'll get to that in a minute. Overall, we're targeting to grow revenue above the rate of GDP growth. We say GDP plus. In the medium term, we're expecting this to be a big plus rather than a little plus. This is driven by the attractive growth markets in which we operate, combined with our market-leading positions, which you're going to hear much more about today from the leaders of each of our business divisions, Stuart, Joe, Andrew and Leigh. In terms of our operating margin, as you've heard from Andrew, we're targeting a margin of between 4% and 4.5%. This not only reflects our confidence in the contribution from our property business as we're near the completion of its recapitalization, it's also confidence in our unique combination of businesses working together, which delivers a greater result than the sum of their parts, as Andrew mentioned before. You'll hear a lot more on this and our 360 approach later from Louisa, our CPO. In terms of cash flow, we're targeting continued strong conversion rates of around 90% through the cycle and aiming for an average net cash position. With -- this will allow a 3x earnings, dividend cover and provide surplus cash, which we'll use to further drive earnings or increase shareholder returns. Now let's look at what underpins our growth plan and gives us confidence in our enhanced targets. Our order book and the framework position is to underpin it. We're all aware that 60% of our order book is target cost or cost reimbursable and the remaining 40% is fixed on a 2-stage process with an average size of just circa GBP 20 million. In addition, our high-quality order book provides clear visibility of revenue, which at this point in the year, already covers, as you've heard from Andrew, over 80% of our target revenue for the next year. When you combine this with the circa 15% of regular work that we can see and never touches the order book, we have visibility today of effectively 5% plus/minus on all of next year's revenue and over half of our FY '27 revenue. This 18-month firm revenue visibility, combined with the nature of the contracts we enter into also provides predictability in cash flows for the same period. You see on the page our positions on the national frameworks, which act as the gateway to the U.K. government's long-term investment program. We currently have positions on frameworks that amount to circa GBP 158 billion of planned expenditure, running out currently to 2030, providing a clear pathway for future orders and thus longer-term revenue targets. In summary, the key takeaway from this slide is that framework positioning and contract mix we have gives us the visibility to comfortably support our balance sheet strategy. Let's consider a little more closely the importance of these framework positions. All major public sector work in the U.K. can be awarded to a handful of companies in each case who already were in places on the relevant sector framework. These awards are based on multiple strict procurement criteria such as adherence to prompt practice -- payment practices, track record of delivery, safety record, carbon reduction, social value and supply chain commitments that are set out in public procurement notices and thus provide a meaningful and increasing barrier to entry to less-established operators. Working with framework providers consistently as Kier has done, fosters strong long-term customer relationships with each framework typically running for 4 to 8 years. Furthermore, as the terms of the work within each framework are largely pre-agreed, this offers further security over the robustness of our future work and revenue streams. Now let's look at another factor that provides us confidence around our ability to deliver our long-term plan. Our access to debt capital markets. In February 2024, we secured long-term financing for the group, issuing GBP 250 million of 5-year senior notes with the first issue in 2 years in the sterling high-yield market. This, combined with our revolving credit facility, which runs to 2027 provides a significant level of liquidity and flexibility as we plot our path to optimizing earnings and returns from our future growth. It also provides us with more earnings opportunity as the bond was placed in a much higher interest rate environment. So far, we've been looking forward. So I think it's also worth reflecting on our track record and how that trust supports conviction in our ability to deliver our plans. In recent years, we have proved that we can deliver for customers and shareholders alike. As you can see from these figures, we have seen significant growth in revenue, profits and earnings, together with growing levels of cash flow and as a result, deleverage, illustrated by period end net cash positions and dramatically reduced monthly average net debt positions. Unbelievably, if you went back to December 2020, this is a reduction of debt and debt-like items of circa GBP 850 million. All this meant an accelerated delivery of our medium-term value creation plan. And it wouldn't be a surprise if some sustainable growth gets accelerated too. All this means that we now have significant flexibility in our capital allocation decisions in order to optimize shareholder returns while maintaining the same disciplined approach that has served us well in recent years. As we generate further cash from operations, we expect to deploy that in a number of ways, while maintaining, of course, our strong balance sheet. Firstly, once we met our modest CapEx requirements, we're targeting dividend cover of around 3x earnings through the cycle. Then we plan to completely recapitalize our property business, so we can generate consistent returns over time, deploying up to GBP 225 million of total capital in that business. If you recall, we deployed GBP 194 million at the half year. So we're nearing the end of this phase. Here, a disciplined approach to the projects we undertake and partners we choose mean that we're targeting to deliver consistent long-term return on capital employed of around 15%. Regarding M&A, we have a healthy pipeline of opportunities, and we'll continue to consider value-accretive combinations that match our core markets. Finally, as you may be aware, in January, we announced a GBP 20 million share buyback program, for which we have bought nearly 4 million shares to GBP 5.2 million, providing a further dimension by which we're driving returns for our shareholders. Overall, you can see how this capital allocation framework complements our long-term sustainable growth plan in tune with our performance targets, while maintaining a strong balance sheet. I'll now hand back to Andrew, who will somehow summarize mine and his messages plus all the later presentations from the team into 4 simple points.

Will he, indeed. So summary. Thank you, Simon. So to summarize before we sort of take the visits to the stands. We have a strong belief in this group and the progress it's made and the strength of the proposition. We just outlined, we deliver industry-leading margins, with a long-term target now set at 4% to 4.5% adjusted operating profit. Our high-quality order book underpinned by our extensive framework positions provide clear multiyear visibility for our plans, and we're excited specifically by the opportunity to enhance returns that our more fully invested property business will offer. And lastly, we have an experienced management team with the operational capability to deliver the sustainable growth plan, which will benefit all of our stakeholders. So before we invite you to enjoy some drinks and explore the stands further, I'd like to perhaps open it up to general questions from the floor and ask Simon, if you want to come and just join me. So now is the you chance, please do far away, Jonny? Is there a microphone? There is. Yes, yes. Here we go. So we can hear you, Jon.

Jonny Coubrough from DB Numis. Thanks very much for all the presentations. Today, or this morning, you set out the upgraded margin target and give a range for it. Curious to hear what's changed over the past year to give you confidence to set that out? And then just a follow on -- when you look at the targets today, was there any discussion around the dividend policy targets and you talked through capital allocation. But as you look forward over the next couple of years, is that another target that could potentially change?

Yes. Yes. So I mean the margins, Jonny, is clearly, as we've got along with recapitalizing that property business primarily. But then in addition to that, a lot of the growth that we've got coming through is in Andrew's area, you've heard from him, the water area. And it's then it's the confidence in that pipeline and how it's developing. So those 2 points have really allowed us to just slightly tweak up the margin targets. And then you mentioned dividend and capital allocation, I think as time goes by, if you look at the numbers, we should be putting more and more cash on the balance sheet that we're saying we are going to utilize to either enhance earnings. So you'll see as we grow, maybe you do part of the business model, put a little bit more into property, but there will be, of course, a trade-off between what there'll be something left. And then you'll be looking at, well, okay, how does M&A compare to increasing the share buyback. I think at the moment, it appears from our shareholders that rather -- on a whole, they'd rather us increase the share buyback than increase the dividend meaningfully.

Aynsley Lammin from Investec. Just 2, please. On the average net cash, I just wonder if you have a kind of quant level of average net cash that you feel comfortable with. Obviously, you've got the capital investment in property if there was a downturn and some of the cash went out the group. How do you kind of view that? And what balance sheet do you think is the right number there? And then secondly, just on the GDP plus the revenue growth, GDP, you said a big plus. What's the constraint -- the main constraints on growth? Is it people, I mean, what's your view of the constraints there?

Do you want to take the growth first?

I'll take the growth first. I mean there is a generic shortage of skills in the U.K., but it's quite specific to certain areas. And I think the nature of our geography, geographical spread of our projects and the local nature of how we interface with the communities and how we train people locally and retain them locally, means that we can mitigate a lot of those sort of problems. And therefore, I don't regard that as a particular barrier to growth. So I think we can manage that. We do a lot of self-help as well. Louisa mentioned it. We are a member of the platinum club, as well over 5% of our employees are in full time sort of training courses or educations, 600-odd apprentices. So there's an awful lot of stuff we do do, to mitigate that barrier to potential sort of growth. I think the other point is in terms of growth while we're confident even despite the financial position at the moment, this government is sort of still to a degree struggling on the runway to get take off on growth the areas we are operating, and we're very clear about this as part of the strategy. They are vital. They're not just nice to have. So you think about defense, single living. They want to attract more people into the forces. While we do that effectively by having a better proposition in terms of remuneration, a better proposition in terms of accommodation. Well, we're building the accommodation. That's what Kier is doing. If you think about defense what they talked about yesterday, they're going to sort of recapitalize the nuclear fleet of submarines. Andrew's business in nuclear, we're recapitalizing the seismic dockstand in Devonport on behalf of Babcock on behalf of the ministry, where they're going to maintain these submarines do the deep maintenance and we're doing likewise with the training facilities [indiscernible] where they operate them from, so it's like that. So the point is, I think the barriers where we operate is not a barrier to growth. And then are the barriers to growth in terms of our capability to deliver it. There are stresses and strains, but we do a lot to mitigate that, and the nature of our business and dispersal of that business, I think, does help enormously. So we're confident in that growth trajectory in the segments we're in.

Yes. And with regard to the sort of balance sheet strategy, I mean, you've heard today about the visibility of revenue that we've got, which goes out quite far. You've heard from Leigh talking about the property projects that we're working on, you can see we're up to GBP 225 million. There's a lot of liquidity there, and there's a lot of availability of capital to extract in a timely basis and still have Leigh returning 15% return on capital employed. So we are very comfortable around 0. And I would say, plus/minus 0.5 turn of EBITDA would effectively be 0 to us. On an average basis, that is.

[indiscernible] from Liberum. The 15% ROCE for property. On Slide 69, you talked about from '27. So I'm assuming from that, that's an exit ROIC return. So probably thinking FY '28, I need to perhaps add another forecast here into our numbers. But how -- what's the progression do you think, given the phasing of the projects in terms of that return? Is it some -- a return starts to step up towards the back end of that full year period?

Yes. No, I mean, I think you'll see it ticking up already a pretty straight line basis would be a fair assessment. Obviously, looking at the transactional nature, that can be a plus/minus in any 1 year. But yes, I think, over time, it would be gradually ramping up to that 15% reset.

There isn't an absolute time period that Leigh always dictates. I will always do 3 years in these development projects or 4 years in that sort of sense. You do have optionality to sort of sell those projects after you've achieved planning. If you decide you don't want to build it and there's better value to take the money out and invest it somewhere else. So the returns can be variable to a degree, control, but there is a generic sort of, let's say, I always say 2 to 3, Leigh always looks to me and says 3, in terms of the seasoning of the capital you've got to put in to get the returns out and Watford is a great example of that over 10 years, you've got an average returns coming out of it, but it will now build up. So Rob was back there.

Rob Chantry at Berenberg. Thanks for the presentation today. Just 1 for me. Obviously, kind of stay quite clear today kind of reinvesting in property and building that up again. Can you talk about, I guess, the long-term weighting the divisional structure, i.e., do you have any desire to build a broader investment portfolio type business where the kind of broader NAV waiting and that gets the enterprise value of Kier. So 225 is a stated target. Is there any desire to go beyond that and invest more broadly in building a broader investment portfolio?

It's quite difficult to hear up here, but the question was is you're going to go beyond -- are you going to go beyond 225?

Not just that. Is there any desire to build a broader investment portfolio with excess cash in the business in the longer term?

Okay. Well, let's just deal with the 225 and the property. I mean, Leigh can probably go beyond that. And as the business grows, the scale of the business grows, the amount of cash it will throw off will grow, and therefore, there is an opportunity to do that. And there's probably a tipping point where you have to go to a different level of capability or overhead. And that may make us sort of rethink that. But I think we're a long way away from that. And you can get efficiencies out of taking bigger parts of existing deals as well or accelerating deals or whatever it may be with the existing sort of capacity that Leigh has in that team. So yes, I think we can go beyond that. But at the moment, we're pretty comfortable that that's the level in which we get liquidity. So we do have to extract capital from that business because of the other businesses sort of turned down for whatever reason, we can do so. So it's a fairly safe proposition. In terms of the other part of your question, will we use it as a more broadly based investment. Well, if PFI comes back in, many of the PFI skills that this company has historically and built all the skills which Steve and his team now operate on the merchant supply side those skill sets do still sit in property. So the company is feeling quite comfortable that it does have sort of operational merchant supply type PFI skill sets as to how to bid into PFIs and it has investment skill sets, 1 of the assumptions we're putting in our plans is that we will top Leigh up with if that's the way the government goes with investments like that, that's an option for us to support the business. But that's the balance sheet for the business, which is great. So all options open to a point.

I guess, to some extent, allied to that question, with private sector capital into public projects from a Kier perspective, do you think there'll be a requirement for a higher return on capital versus that 15% that is targeted in property?

Well, you'd be taking value add at different levels in PFIs. That's what happens to take out merchant supply level, you take it out of the investment level as well. So you've got to look at it on a case-by-case basis. But to a degree, there's a couple of hurdles I'm sure Simon will apply. What sort of level of the hurdle of buying your own shares back, M&A hurdle, 15% return on the capital in the lease business hurdle and you look at those in the round. But PFI, you do have an ability to take fees out, you have ability to take merchant supply out, building into them or the other businesses are building into them, you can take equity returns out as well. So we'll look at it. Any more questions or has the thought of a drink now overwhelmed you? Yes. Okay. Look, thank you all very, very much for coming. Thank you for standing as well. Those of you who did in my presentation, that's very noble of you and giving us all your attention. Thank you to all my team as well who organized all of this beyond the speakers. He did it as well. And please do now join us for a drink to celebrate the end, I guess. There you go. Thank you very much.

Thanks, everyone.

Hello. I'm Stuart Togwell, Group MD for Kier Construction, a role I've held for 2 years. I'm also an Executive Director on the Board and I've been at Kier for a total of 6 years. Before life at Kier, I was at Wates for over 30 years. So I've been lucky to work for many decades in the industry I love. I'm here today to talk to you about Kier construction, GBP 2 billion growing in sustainable U.K. business. we build economic and social infrastructure for His Majesty's government, commercial properties for blue-chip companies and maintain properties and homes for the public sector. We do this through a network of national delivery centers at the heart of the communities we are proud to support. That's a bit about my history, and I'd like to talk about Kier's history. Founded in 1928, we have a rich heritage and real estate power having been in business for almost a century. In that time, we've continued to use our engineering prowess to be at the forefront of modern thinking to help shape destinations and places. Picking out a couple of highlights demonstrating this are Mulberry Harbour, a World War II feat of engineering using the D-Day landings. More recently in 2020, the Nightingale Hospital demonstrating our rapid response to a national crisis. And then up to this year, HMP Millsike, the U.K.'s first all electric prison. This category C prison is a prison that Louisa refers to in her presentation. It has a capacity of around 1,500 and is the first prison in the U.K. that has been delivered as part of the alliance for new prisons. This model allows the members of the alliance to focus on repeatability and continuous improvement through digital design and modern methods of construction to drive better performance in capital delivery and life cycle costs. We are evolving this approach to secure more work in our targeted sectors. So what is Kier construction? Well, we build economic and social infrastructure buildings for His Majesty's government and commercial properties for blue-chip private clients, delivering over 200 projects each year, but we don't stop there. Our key places business maintains assets by providing facility management services to over 5,500 public buildings and housing maintenance to the public sector. Some of the facilities management is delivered through 29 PFI contracts. We work hard to maintain an industry-leading Net Promoter Score of plus 59. We focus on 8 core sectors. Some of our key clients include the Department of Education for which we have delivered on average 14 schools and colleges a year, the Ministry of Justice supporting its prison expansion program, the Department of Health and Social Care, covering all scopes of projects from our flagship Luton and Dunstable Acute Hospital project due to complete this summer through to Kier Places work with the NHS Blood and transport service and a host of projects in between across our regional build teams, delivering essential local health screening services. And the Ministry of Defense, which we support to booster the U.K.'s defense infrastructure, as part of the government's commitment to increase defense spending to 2.5% of GDP from April 2027. As 1 of the MOD's delivery partners for its GBP 5.1 billion defense estate automization portfolio, we excel in this highly regulated and challenging landscape, benefiting from the experience of our colleagues who have joined us from previous roles in the Armed Forces. Our commercial clients include Derwent, Stanhope, M&G and Heathrow Airport to name a few. We cover the U.K., too, in Scotland, we worked closely with the Scottish Prison Service on our delivery of HMP Glasgow, a contract worth GBP 684 million. Over 79% of our clients work with us again and again. Thanks to our quality of service and the relationships we maintain and provides us with a sound foundation to grow. Here, I wanted to put out some key facts and figures to demonstrate our track record in some of our core sectors. We're proud to have delivered 266 educational projects and 151 health care projects in the last 6 years alone across the length and breadth of the country. It's not well known that we've also delivered circa 700,000 square feet of London commercial space for our blue-chip developers since July '23. We also have a major opportunity for defense after we were repointed to the GBP 5.1 billion defense estate optimization portfolio in '23, working on projects including Keogh Barracks in Aldershot and Rock Barracks in Suffolk. We're also proud to have long-standing relationships in place across a range of major frameworks, both nationally and regionally. We've worked nationally with the DFE for 23 years, and the Department of Health and Social Care for 20 years. These critical relationships built on years of earned trust cement our role as a trusted partner to government delivering critical infrastructure. We have an order book of circa GBP 4.5 billion of good quality work across all of our targeted sectors. We will be able to replenish this and grow our business for our position on the 33 national frameworks and 37 regional frameworks, which provide us with access to a potential GBP 127 billion of working sectors that will continue to have spend. These frameworks are with customers where we have a long-term relationship with and predominantly have call-off contracts procured for a 2-stage process. This enables us in the medium term to grow through work on equitable terms for products we have successfully delivered in the past. At Kier Construction, we use a delivery model that allows us to have discipline and scale. But what does that mean? Well, it means consistency, predictability and assurance for our clients and setting high standards for our projects, whatever the size of location enables us to grow a sustainable business. We deliver locally through the regional businesses. Shaded here on the map, our smaller work facilities management and housing maintenance is delivered for a dedicated customer-oriented business Kier Places, and our larger projects are managed by our strategic projects business, all are also supported by our in-house M&A team. Our network of regional delivery hubs ensure we have genuine local knowledge and insight to offer our clients as well as the agility and mobility to suit client demand. Many of our people are end users of the facilities we deliver, which brings heart and passion into our work and reassures our clients that we understand their needs and vision. We have a dedicated clients and markets team who are our thought leadership hub for all our targeted sectors and ensure that we not only secure our place in key frameworks, but also strive to be 1 of the top 3 providers within them. We take this on-the-ground expertise and combine it with robust national functional support, guidance and governance, ensuring we have all the bases covered. It is an honor to lead the business with so much talent across our network of sites and offices. Our leadership team brings with them exceptional industry-leading experience, speaking our clients' language and understanding the commercial environment to deliver award-winning projects. But how do we ensure we stay ahead of the game and grow sustainable business? Well, by continuing to improve on our delivery performance, by adopting the core principles of our 360 approach. By adopting our innovative digital approach, 1 of the key pillars of the full 360 offer that my colleague, Louisa, will take you through in more detail. Kier's digital solutions support the full project life cycle from early design through to long-term operation. Our solutions provide realtime insights that help clients optimize performance, drive efficiency and maximize value from day 1. It allows us to derisk and add value to design to maximize the amount that can be manufactured off-site, review options for circular design, input with confidence into carbon models and change future designs based on the building performance during operation. Our digital director is generating more work for us through supporting clients to save time, cost, energy using high-spec digital twinning technology, not only during construction but long into maintenance and operation to maximize their assets and save money. We secure repeat business because we take our social value commitments extremely seriously and leaving lasting legacies within the communities we work and live in. On the slide, you'll see some of the proof points of this, but our commitment to social value is embedded in the DNA of care. It helps us manage the skill shortage because we are passionate about giving people a chance of fulfilling their careers within the built environment. We create hundreds of apprenticeship opportunities each year, and our making ground program offers employment to prison levers, giving them a second chance when they need it most. Our people spent 2,876 hours volunteering in the last year, getting out into their communities and making a difference, supported by the paid leave we offer to enable this. Our clients use us because of our ability to work with them to decarbonize. At Kier, we take a whole project life cycle approach to reduce an embodied and operational carbon. Here you can see a visual project network for Derwent, which adopted a range of solutions to drive carbon reduction, including replacement low-carbon cement, which helped the building achieve a global standard for smart building, the Platinum Smart score certification. Our portfolio allows us to learn fast and share knowledge across projects within the public and private sector and build and maintenance projects. We also set ourselves clear targets to hit 71.5% carbon reduction and 100% renewable energy used by 2030. We're lucky to have some of the best carbon experts in the industry, working with us to ensure we offer our clients a truly cutting-edge and tailored solution to their unique challenges across a range of sectors. Adopting industrialization mindset is a particularly exciting part of growing a sustainable business as the right approach can make a radical difference to our clients. We use our delivering discipline at scale to deliver standardized design using the most appropriate supply chain partners to give our clients better repeatability, quality and performance. Kier's design experts created a distinctive X-shaped T60 Houseblocks. Louisa refers to her section to drive carbon reduction whilst having security and rehab in mind. This mindset is a key factor why clients choose us to work widely across their estates. So that's the 4 key elements of our integrated 360 approach, which, together with our other capabilities, engineering, working in live environments and design management, make sure we exceed the sum of our parts, a truly compelling and an industry-leading offer for Kier clients. Yes, we work with clients to build and maintain high-performance assets, but we can also support with design, land development provide essential infrastructure or environmental services, all under 1 roof across our 4 divisions. This is our superpower and gives us competitive advantage. This is our 5-point plan to grow sustainable business, growing our market-leading position through our build and maintain offer, working as a trusted government partner and with the very best from the commercial sector. Our strong order book of GBP 4.5 billion will be sustainable grown from access we have to the GBP 127 billion of potential framework opportunities procured on equitable terms. Consistency of delivery is achieved for our standout regional model adopting the discipline and scale approach to deliver repeat business consistently across our portfolio of both public and private sectors on billed and maintenance contracts. We both secure 79% of repeat business and gain access to new clients or government spend by continuing to innovate and give clients practical solutions to complex problems so they can concentrate on meeting their needs. And finally, our 360 approach representing the full breadth of our capability, supporting clients at all stages of an asset's life cycle. Thank you very much.

Hello. My name is Joe Incutti, and I'm the Group Managing Director for Transportation at Kier. I've been with Kier for 20 years. I'm a qualified accountant and started my career in Kier as a Divisional Finance Director. I've now been a Group Managing Director on the Kier Executive Committee for 6 years. Kier Transportation has a key role to play in providing critical transport infrastructure across the country, enabling millions of journeys each day. We are uniquely positioned as a one-stop service provider offering design, construction and maintenance across key sectors, including highways, rail, aviation and ports. Firstly, we have HS2, where we are undertaking 80 kilometers of civil engineering work through the central section. This includes 15 viaducts, 7 kilometers of green tunnels, 22 kilometers of road diversions, 81 bridges and around 30 million cubic meters of excavation in partnership with Eiffage, Ferrovial and BAM. We maintained 21,000 kilometers of the country's highway networks, the national highways, Transport for London and several local authorities. And we're also enhancing infrastructure through Network Rail's Northwest and Central region, covering an area from London Euston to Cumbria. I'll be working with local authorities and subnational transport bodies to improve their transport networks. The market for Kier transportation services is very large, stable and consistently underpinned by long-term funding commitments. Our framework positions are reflective of our sector knowledge and experience as well as our client relationships developed over the past 15 years or more. Examples include HS2 around GBP 50 billion, Network rails 5-year control periods were currently in CP7, which is GBP 43 billion within the period from 2024 to 2029. The National Highways Road's investment strategy were currently in RIS 2, GBP 24 billion covering the period from 2020 to 2025. And the integrated rail plant with projects such as East West Rail and the TransPennine Route upgrade which have strong local and central government support. And then there's local authority transport from them, including Transport for London, where we have long-established relationships as illustrated by the infographic on the sand. Private sector investment into ports and aviation is also key, and aviation is of particular interest as the industry responds to capacity constraints and the need to refresh infrastructure to align with new aircraft fleets and local authority transport forming, including Transport for London, where we have a long-established relationship as illustrated by the infographic on the sand. And then there's private sector investment into ports and aviation. Aviation is of particular interest as the industry responds to capacity constraints and the need to refresh infrastructure to align with new aircraft fleets. And now I'd like to take a moment to focus in on our design capability, which is fundamental to our integrated 360 approach. Kier Design resides inside the Transportation division but services the entire group. There are over 750 people in Kier design covering a broad spectrum of capabilities from architecture through to highways design. This allows us to offer unique integrated design and build solutions, which are cost effective and efficient. Put simply, this means that we can build what we have designed and we can maintain what we have built, fundamentally changing the way these challenging interfaces operate. Our designs are pragmatic, buildable and maintainable, reducing construction and fair life asset costs. Furthermore, our integrated design offer can also simplify and accelerate procurement processes for our clients. Helpful illustration is our design light approach used in our local authority contracts, where we adopt an off-the-shelf approach to desire to drive down costs and project duration. This essentially involves taking a previous similar design and modifying it to meet the requirements of a new scheme. Jordan Flint is our Managing Director for design and he is here with me today and will be available later to talk further about our design business. Design works alongside our in-house digital capability, which is also showcased here today with our QuikSTATS solution being presented later by our Digital Solutions Director, Richard Burdett. QuikSTATS produces a drawing, identifying buried services in just a few minutes compared to over a week using conventional methods. And now I'd like to take a look at some of our key clients and projects. So in highways, I'll start with National Highways. In maintenance, we have responsibility for 3 of the 12 national highways designated areas, 1 in the Northwest and 2 in the Southeast. In major projects, we're going to point to deliver schemes in the north, including the A66 and Lune Gorge bridges. Both of these projects are currently in the design phase. Lune Gorge Bridges is a scheme to repair and renew 8 bridges in Cumbria. And there's further detail on this in a separate infographic on the sand. We envisage there will be many schemes of this nature in the coming years due to the fact that many of these structures were built during the '50s and '60s and are reaching the end of their life. Furthermore, our strong performance in the North has enabled us to work outside of our region, and we're currently building a GBP 500 million new bypass on the A417 in the Cotswolds. The A417 project is covered in more detail in Louisa Finland's sustainable growth presentation. We have several local authority contracts, including North and West Northamptonshire, Shropshire Council, Birmingham City Council, Somerset Council and Transport for London. These are multiyear contracts, having a range of maintenance and repair services alongside lower value enhancements and the risk profile of these contracts is appropriate and commensurate with the type of work being undertaken. Now turning to rail. Firstly, we have our HS2 business, which I mentioned earlier, where we're undertaking 80 kilometers of civil engineering work through the central section. More information is available for you to browse at your leisure in the separate infographic on the sand. Network Rail where, as I mentioned earlier, we are appointed in the Northwest and Central region delivery enhancements across an area that spans from London, Euston, through to Cumbria. And later, I'll show an example of a scheme we recently completed for Network Rail in this region. And some national transport bodies, including Transport for Greater Manchester, West Midlands Combined authority, both of which were assimilated following the acquisition of the Buckingham Growth business in 2023. And then looking at Aviation, at Heathrow Airport, we're working with our colleagues in Kier Places on noise abatement works. And there are, of course, significant opportunities for future projects at this and other airports as the industry addresses capacity constraints and the need to adapt airports to new fleets. And now, as I mentioned earlier, I'd like to show you an example of 1 of our rail projects. Alongside aviation, rail represents a significant growth opportunity for our under successful acquisition and integration of the Buckingham Group Rail business and our appointment to the network rail CP7 framework covering the period from 2024 to 2029. This particular GBP 100 million scheme was delivered on the previous CP6 framework that ran from 2019 to 2024. And is the electrification of 9 kilometers of railway between Wigan and Bolton. As part of the nation's drive towards sustainable transport, allowing greener, longer and quieter trains to replace diesel trains and improve customer journeys. There are many more schemes like this that need to be undertaken between now and the 2050 target for a net zero railway. Much of our rail network was conceived at the time when NATO accommodate overhead line electrification equipment simply wasn't a consideration. Electrifying the railway therefore often requires civil engineering challenges to be overcome such as the need to significantly alter or rebuild bridges to create room for overhead line equipment. The scheme required extensive work to be carried out to signaling and track 17 bridges and 2 level crossings had to be modified. And this new bridge at Ince Green Lane in the video is 1 of 6 bridges on the scheme that required complete reconstruction to be carried out. The work at Ince Green Lane was carried out over a 9-day blockade. This bridge carries hundreds of pedestrians and vehicles over the railway line each day. And as an example of exactly the kind of civil engineering challenge to be overcome to electrify our railway. You can see the proximity of nearby residents who had to be kept informed through community engagement and leaflet drops during scheme. The new bridge has been prefabricated and is being installed on 1 of the largest low loaders in the country. And if you look carefully, you can see the operative using remote control to control the movement of the bridge as he carefully guides it into place. And the existing footprint is also reinstalled into a position. We're really delighted to have successfully completed this prestigious scheme this year. So in summary, transport infrastructure is fundamental to a thriving economy and to our communities. Kier Transportation has strong market-leading positions. In highways, we have a top 3 market position in both highway maintenance and major project delivery. And since we compete against different businesses in these 2 areas, that places us in a unique position in the highway sector. Our long-term embedded client relationships position us strongly in respect of current and future long term frameworks. And our unique in-house design capability allows us to put a differentiated proposition forward to our clients as well as statutory obligations to keep networks operable and serviceable, aging assets and climate adaptation further underpin long-term demand for our services. Thank you. I hope that was helpful.

Hello. I'm Andrew Bradshaw, the Group Managing Director of Natural Resources, Nuclear Networks. I've been in the infrastructure sector for 37 years, and the last 11 of those have been with Kier. I've been in role and part of the Executive Committee for nearly 4 years. In natural resources, nuclear networks, we have the resources and expertise to lean into key markets with significant growth. Our market-leading coverage across water in England and Northern Ireland provides us with extensive opportunities on our water frameworks along with good geographical coverage of projects in nuclear energy and the environment sector. Across the Water and Environment business unit, we have a unique offering in water management and water engineering skills to build and maintain infrastructure, whether it's dealing with the capture of rain water in our reservoirs through to the treatment process before entering the tops of our homes. The management of the effects of extreme weather to prevent damage in flooding or ensuring wastewater is treated and safely dispersed into rivers. Additionally, the environment team restore or create natural habitats for coastal and environmental protection. Our Nuclear and Energy business unit deploys our people across restricted access sites for infrastructure to help deliver the U.K.'s net zero energy, maintain national security and be at the forefront of future nuclear energy technology. All of this is supported by our integrated 360 offer with extensive specialists and transferable skills across the division and group. Design, which resides within transportation, deliver in-house design capability for temporary and permanent works whilst providing environmental and ecology skills. In construction, they construct buildings to house people and equipment associated with the assets were built and property are there for development opportunities presented by the land our clients may not need. An integrated business that sets us aside from our competitors that leans into our highly funded target markets. Water has seen record investments of GBP 104 billion approved for the asset management plan 8 between 2025 and 2030. Kier has secured access to GBP 15 billion of frameworks across 10 Water clients. Going forward, sustained investment will be required for future AMP cycles, and many of our contracts are extendable into future funding periods. We build and maintain all types of assets in the treatment of clean and waste with our civil engineering and [indiscernible] expertise. Beyond the ramp, there are GBP 24 billion of strategic schemes that have been identified for water redistribution and storage under Ofwat's rapid program. While the 2 reservoirs announced last week in Lincolnshire and East Anglia. In environment, the EA stated that GBP 1 billion is needed to be spent every year for the next 50 years to avoid flood damage. Kier has frameworks across the EA, Canals and Rivers Trust as well as access to water companies for water management solutions. Through our infrastructure works, we are restoring and building environmental solutions for drainage, rivers and reservoir assets like the Toddbrook Reservoir case study I'm going to talk about shortly. In nuclear and energy, the U.K.'s capacity in nuclear is to increase fourfold. Hinkley Point C and Sizewell C are being constructed, advanced and small modular reactor being developed and the next generation of nuclear energy is fusion. Wider in nuclear, defense spending is to increase to 3% of the U.K.'s GDP and our skills are transferable across this sector as we build nuclear license infrastructure for the submarine and weapons program while supporting our construction divisions defense sector plan. I'm now going to talk you through where the growth revenue will come from, from my division. In water, we've added 3 new clients with United Utilities, Wessex and Southern Water, each have around GBP 3 billion to invest in our water assets. With our existing clients in water, Severn Trent, Thames, Anglian and Yorkshire have all seen their determination substantially increase in AMP8. And we have resecured extensions on new frameworks with them. And in environment, the new EA frameworks will provide much needed investment for water management to meet the challenge of population growth and climate change. Therefore, in these water engineering and water management areas, our revenue for the combined business units of water and environment will more than double over this funding period, and we expect more growth to come beyond this in the next ones. In nuclear and energy, we have works at Devonport Dockyard in Plymouth with the construction of the submarine maintenance facilities. AWE as part of weapons program and along with Hinkley Point C, UKPN and X Energy, these will continue over the cycle, all with growth to Kier. And all of this is on top of the solid foundation of our existing long-term relationships and frameworks with our clients to provide the division with a flexible and diverse portfolio. All in all, with water, environment and nuclear and energy, we will see the overall revenue of our Natural Resources Nuclear Networks division double over the current spending period. And again, we expect more growth beyond this in the next ones. I'd now like to talk you through our work at Toddbrook reservoir in North Derbyshire, that was at the center of many newsreels in 2019. Here is the footage of the emergency incidents as it happened, where the residents of Whaley Bridge were at the risk of the dam break in its bank. Kier assisted with the RAF and the emergency services with the evacuation and emergency repair of the dam. We pumped out 1 billion liters of water from the reservoir to reduce it to a safe level. From that day, we began to work with the Canals and Rivers Trust to assist with the construction advice and design feasibility. Following this, our construction works have begun and are still ongoing to construct the Tumble Bay that in the event of another severe weather event have created capacity to water for water to overflow to move into water courses further on downstream without a repeat of the incident in 2019. During the works, our team have been working closely with the people and businesses of Whaley Bridge to ensure minimum disruption and deliver GBP 16 million of social value using local supply chains, recruiting from areas and volunteering days to enhance the village. I personally have painted the gates near the local school. Additionally, many environmental benefits have been achieved, where part of the site has been designated an area for protected species, and we've rescued 30,000 fish and relocated them. And this model and the video is the finished asset. Not only will we have constructed an asset to prevent flooding, we have created an area for people to come and enjoy picnic and dip tolls in the water, play in the new children's play park and walk across the dam during their leisure time. Beyond this, the Canals and Rivers Trust are reestablishing the sailing club that lost their clubhouse and storage area, truly creating an outdoor facility for boat enthusiasts to enjoy. In summary, this provides Kier in a market-leading position in Water following our successful bid period, and we have access to GBP 15 billion of framework opportunities. It's a unique offering of water management and water engineering and skills that aligns our clients' needs. That we'll see our revenues more than double in this area. Expertise and operating a nuclear license sites that not all in support of the natural resources, nuclear Networks division. But adds strength to our construction and defense sector plan. That overall leaves us very well positioned for sustainable growth, doubling revenues across my division in well-funded sectors with sustainability at the forefront of everything we do in essential services we all need for our everyday lives. Thank you.

Hello. I'm Leigh Thomas, Group Managing Director of Property. I've worked for Kier for 20 years and have been Managing Director of the property business now for the last 10. Today, I'll be talking you through the property business and how we fit in the group. The business focuses on mixed-use urban regeneration through public and private partnerships and has an opportunity pipeline totaling GBP 3 billion gross development value in joint venture, should we choose to build out all these sites are sold. The business is split between commercial and residential development as a broad-based portfolio that manages risk and focus on sectors and locations where we see strong demand with significant growth opportunities. With GBP 194 million of capital invested at half year across 34 schemes, our average capital per scheme is only around GBP 5 million. Our property strategy responds to 4 broad challenges. On demographic change, population growth and urbanization is driving demand for housing with an estimated 1.5 million homes needed to be delivered by 2030 and GBP 4 million by 2040. The rise in single-person households and an aging population is also increasing demand for build to rent, senior living and affordable housing, all key delivery routes for our residential strategy. With economic growth, the government's industrial strategy is central to improving U.K. growth, and we'll focus on rebuilding Britain, supporting jobs, unlocking investment and improving housing standards. All things the Property business delivers. A good example of this is the building research establishment estimates, poor quality housing cost the NHS, GBP 1.4 billion per annum. On changing consumer trends, online retail spending now accounts for 27% of all retail sales, which continues to drive strong demand for last mile logistics warehousing. Supply chain resilience, robotics, AI, automation and population growth will further drive demand for best-in-class properties. And lastly, on climate change, ESG and net zero carbon targets are driving demand for modern sustainable buildings like our Bracknell development that Louis has spoken about in her presentation. Good design is central to climate resilience and helps well-being and the attraction retention of staff, all important considerations for employees at the moment. The legislation here is focused on increasing investment, removing delivery friction while driving improvements in the built environment. Devolution and planning reforms in particular, will speed up development, lower delivery risk and further improve returns. Minimum targets around energy efficiency will drive demand for more modern stable buildings. So let's have a look at what property brings to the group. The middle segment highlights the customer, financial and operational synergies we have with group and demonstrates the role that the property business has to play in the delivery of the medium-term plan. Customer synergies, 90% of Kier's revenue is from public and regulated sectors. These customers often have large land holdings, but lack the expertise to deliver their own objectives. Our integrated 360 approach gives us end-to-end capability to support the needs of these customers, whilst providing new opportunities for us to work on. On financial synergies, our strong cash flow generation around group allows the investment of capital into property, which improves revenues and profit and will help deliver the group's target margin of 4% to 4.5% as we go through the plan period. Our balanced portfolio benefits from really good liquidity which gives us flexibility in how we realize profits and recycle capital should the need arise. And finally, on operational synergies whether it's directly awarding work to other divisions or using the other divisions to help us manage risk by working together through the integrated 360 model, it offers us exciting opportunities to grow the wider business, where 2 plus 2 has the potential to equal 5. The outer circle shows how our partnerships are starting to feed each other by driving better margins and higher levels of growth. An example of this is our South Wokingham project, where in collaboration with Miller, we have secured planning permission for 1,400 homes. Rather than just selling the land and recognizing profit after achieving planning, we are now able to sell our sites into a private second joint venture and benefit from our partners' specialist experience and supply chains to deliver sales from the housing as well as capturing land profit, something historically, we didn't have the capability to do. The value creation model, this 5-step process of controlling land, obtaining planning, building and securing an occupier and then selling is how we create value. As we go through the steps, we reduce risk, improve liquidity and increase value. Typically, this process takes 3 to 5 years from start to finish. But by pre-letting or forward funding before construction, we can accelerate the sales process, reducing risk and improving returns. With a pipeline of opportunities totaling GBP 3 billion and 55% of this already benefiting from planning commission, we have already created significant value within the portfolio. On the construction phase, all of our developments are delivered through design and build contracts where delivery risk is passed to the main contractor. We can also, where appropriate, award work directly internally through our integrated 360 approach, which delivers additional revenue to group. Out of our GBP 3 billion opportunity pipeline, the construction element is in the region of GBP 1.5 billion, so potentially considerable work for other divisions to assist with. Securing occupiers on our commercial development helped by having established relationships that allow repeat business and remove some of the delivery friction and allows us to do deals quicker. And finally, with stable capital and maturing partnerships, we will see an increased ability to generate fee income in the portfolio and to pre-let and forward fund elements of our developments before construction starts, improving ROCE and capital efficiency, which means we expect to exit 2027 on or around our target 15% ROCE. This slide compares our public sector JV model with a traditional development model. On a traditional development model, land is generally purchased upfront and margin flexes up and down through delivery. However, on the public sector model, because these public private partnerships are long term, margins are agreed and fixed upfront and it is the land value that flexes up and down until the land enters the joint venture. Therefore, insulating our margins from market volatility. As our public sector partners share in development profits as well as receiving other wider regeneration benefits, the land flexing up and down is an acceptable variable to achieve these wider objectives. Over 60% of our current GBP 3 billion pipeline of opportunities has been secured in this way, which means the majority of the portfolio is insulated to land value volatility. Now let's look in detail a case study that illustrates how we create value and mitigate risk over the course of the project. Watford Riverwell is a 20-year 50-50 joint venture between Kier Property and Watford Borough Council and will set up to regenerate council assets across the whole of the borough. The first site was Watford Riverwell, which is a 70-acre site in West Watford, close to Watford General Hospital and Watford Football Club. You can see from the aerial photograph that the site was an underutilized brownfield piece of land that was very contaminated due to historic uses like power stations and other heavy industrial uses. The first phase consisted of us remediating the site and the delivery of a new 1.5 kilometer road, which opened up the sites and provided improved access to the hospital. Because the regeneration was a public private partnership, which delivered hospital and wider public sector benefits, we were able to access GBP 9 million of grant from the NHS and GBP 6 million of interest-free loan from the lab, which helped viability. This improved access to grants and loans through our public sector partners is 1 of the benefits of Kier being in these public private partnerships. Over the last 9 years, we have delivered 6 phases in the process of delivering another 4, which has been a mixture of public open space, hospital infrastructure, commercial, residential and senior living developments. The remaining 3 phases are all residential in nature and will be delivered over the coming years. The initial investment of GBP 25 million paid for the road, the remediation and the planning and was mitigated with GBP 50 million of that LEP and NHS grant. Therefore, reducing Kier's initial equity requirement to GBP 5 million. You can see from Column 3 on this slide, the gross development value of the development totals GBP 500 million or GBP 500 million of potential revenue to the joint venture if we had chosen to build out all phases of ourselves. Column 4 by contrast, shows how we actually delivered these phases, which is a blend of direct development, forward funding and land sales. By maintaining flexibility in our exit rates, together with a disciplined approach to capital investment, we have managed our peak equity to under GBP 13 million and our average capital to GBP 6 million whilst facilitating over GBP 400 million of regeneration to date and GBP 500 million by the time we finished. With Kier's fees totaling around GBP 4 million, this is approximately 20% of our total return. This reflects the increasing opportunity of earning fees on a low-risk basis within the wider portfolio, which helps improve ROCE through the medium-term plan. The ability to speed up or slow down the phased delivery of the project and adopt these flexible exit routes has helped us manage risk in what has been a turbulent market cycle with Brexit, COVID, bond crisis, hyperinflation and a war in Ukraine, while still delivering strong returns on the project or well over 20%. This is how we successfully managed an opportunity pipeline of GBP 3 billion gross development value on capital of just GBP 200 million. So in summary, we have a clear synergy with group that will deliver strong revenue, margin and profit growth over the plan period. We have a proven track record in urban regeneration across all asset classes and with a secure pipeline of opportunity totaling GBP 3 billion, we have clear visibility on revenues over the next 5 years. And with the government focus on driving growth through investment, job creation and housing delivery, the property business is well positioned to deliver our target 15% return on ROCE. Thank you.

Good afternoon, everyone. I'm Louisa Finley, Chief People Officer at Kier Group. And today, I'll be answering the fundamental so what question of how we add value for customers, drive sustainable growth and enhance shareholder returns. In short, we do this through synergies that allow us to deliver more than just the sum of our parts. Kier's unique structure and operations, that means that while our 4 divisions each add value in their own right, we also benefit from a group layer of capabilities, our glue, if you like, that produce powerful synergies, these are complemented by our commercial expertise and robust commercial controls, and all this add value to our customers and Kier. Within our portfolio, we have experienced people with the capability and knowledge to deliver across the whole of a project's life cycle. And we have created a culture where our people can truly shine and let their experience come to life in their work. As you'll see on this sand, we've got some great employee engagement stats. Our November 2024 employee engagement survey had an engagement rate of 80% and more than 85% of Glassdoor reviewers would recommend Kier as a good place to work. Combined with 95% of our colleagues agreeing that they collaborate with each other to get the job done. You can see the impact of the high performance culture that we've built. Everyone is able to contribute and thrive, and we can drive efficiency and productivity across our people and our extensive supply chain. Let's look more closely at our integrated 360-degree approach, a golden thread, which embodies how we operate. It describes how we deploy our complementary capabilities across our business divisions to drive synergies and thus, superior results for customers while correspondingly increasing margins and shareholder value. Ultimately, Kier has the end-to-end capability to support clients at any stage of a project or asset life cycle. That capability is underpinned by a strong commitment to digital, broader environmental concerns, particularly decarbonization, industrialization and adding social value. And our ESG successes add a further and deeper dimension to our sustainable growth strategy, meeting double materiality needs and delivering continuous improvement and the best practice approaches. Let's take a look at the impact that each of our capabilities can make. Firstly, develop. We're improving towns and cities by designing, planning and regenerating spaces that can be used for homes, businesses and other purposes, helping both private and public clients make the best use of their land assets. Secondly, design. People often think of design as the preserve of the consultants, but our 750 strong in-house design team have the unique benefit of being embedded into our business. So they understand both practical and theoretical requirements from years of working in partnership with their operational colleagues. This ensures that designs are both safe and buildable while delivering the best value and often exceeding clients' original specifications. This combination is something that sets Kier apart from both pure design consultants and our competition. And then we move to engineer. Our engineering solutions allow our teams who are grounded in sector and technical expertise to deliver answers to complex problems. Having these skills integrated into our approach delivers both project and bottom line benefits to our clients and to Kier. We are experts at building at both a national and local scale, delivering circa 400 projects at any 1 time, operating across multiple sectors, we have national reach as well as access to local suppliers and skills. Our proximity to local community also means we understand the drivers and ambitions of our clients, enabling us to deliver bespoke solutions. For us, a project isn't just a transactional activity that ends with delivery. We have expertise in designing and delivering a project as an asset, which needs efficient maintenance and operation throughout its life cycle. As digital training, which you will hear more about from Stuart in Construction, becomes more sophisticated, the opportunity is for us to provide that support grow even further. The ability to retrofit and repurpose a building is also critical, as standards change or upgrades are needed, but is particularly the case in the move towards a net zero carbon future. Taken as a whole, this extensive experience and expertise has the benefit of delivering added value for clients while supporting long-term sustainable growth for our business and enhancing margins. So that's the theory behind our 360 approach, now on to what it looks like into practice. A great example of operational synergies achieved here through our design and build capabilities is the A417 project with National Highways. This project will improve the connection between 2 dual carriage way sections of the A417 in Gloucestershire, removing an accident like spot and reducing congestion in the surrounding area. This GBP 460 million project combines the skills of multiple care teams, including transportation and the construction businesses, our design teams, including temporary works and utility expertise, our facilities management business and also Nordis Signs, a Kier business that supports people disabilities and long-term health conditions. Working with National Highways, our ability to optimize the design and thus, the delivery program was key, as was a solution that kept the traffic flowing throughout the project. Added value from the project comes from solutions that will make journeys shorter, less congested and safer. Gradients have been designed to reduce carbon usage and the use of dry stone walling sympathetic to the landscape and providing green crossings to keep communities connected. Additionally, our in-house design team also redesigned bridges and to challenge the extent of the retaining walls. Our expertise in sustainability played a huge role in our selection. We've introduced HVO fuels to the project alongside using solar lights and hybrid generators and as a result, have already saved circa 700 tonnes of carbon. We also developed an innovative biochar solution to lock in carbon from vegetation clearance, and are currently trialing this as a solution for removing microplastics from road runoff. Ultimately, the project will realize local economic benefit, including local employment of GBP 14 million. Let's look at an example of our development design capabilities and how they deliver synergies. Kier property works in private and public sector joint ventures to maximize and develop land value and importantly, also in partnership with our other 3 divisions. At Logistics City and Bracknell, a project with a GDV of GBP 40 million, we worked closely with our in-house design teams to understand existing power and utility provision to develop solutions before the development began. And notably, Logistics City, Bracknell is Kier Property's first EPC A scheme, its first net-zero carbon scheme and it had a 96.3% BREEAM score, an outstanding rating. Our recessors said they've never seen a score this high and we understand it's the fourth highest globally out of more than 4,000, putting us in the top 0.1% in the world. This result was achieved through close internal collaboration, building and improving on previous projects, we are now using Bracknell as a blueprint for our current project, Logistics City, Milton Keynes. Thirdly, the let's look at how our design and engineering capabilities deliver synergies. Sustainable solutions are key to winning work and with our ability to deliver projects that offer environmental and social benefits, this gives a clear competitive advantage. Here, you can see a model designed and created by our in-house design team of the 76 million Mansfield sustainable urban drainage system or SuDS. It's the U.K.'s first and largest retrofit catchment scale flood resilience program designed to lower the rate of water entering the sewer network built by our Natural Resources Nuclear and Networks business, the scheme provides a natural solution to the demands of climate change through filtering road runoff, improving flood resilience and creating a greener environment for the local community. By utilizing QuikSTATS, Kier's underground utilities clash detection platform, we realized benefits in both safety and our ability to make quick informed decisions. We made sure we built a long-lasting solution that positively impacts the community of Mansfield. This project has also become a blueprint for urban climb and resilience, which will be used in AMP8, the current 5-year water sector regulatory cycle. With positions on 15 frameworks across 10 water clients, for Kier the opportunity to replicate similar solutions are clear and much in demand, given the continued pressure on our water infrastructure. Lastly, let's look at how a combination of multiple capabilities deliver synergies. A great example is our expertise in the justice sector, where for over a decade, we have worked on major projects, providing a model for projects and other sectors such as health care and defense. Here, we have created a blueprint for the Ministry of Justice approach to prison delivery and delivering a series of first. The first modern methods of construction or MMC prison at Oakwood, the first prison to deliver targeted capacity houseblock, T60 designed to support rehabilitation at Five Wells and the first fully electric prison at Millsike, and we have remained committed to sustainability throughout. From our BREEAM excellent rating at Oakwood to 95% of waste being diverted from landfill at Five Wells to offering 100 making ground training and employment opportunities at Five Wells and HMP Millsike and creating almost 800 local jobs at Millsike. Major construction projects such as these also provided opportunities for our other businesses. For example, transport was employed to complete asset condition surveys, works planning and scheduling and permits and real-time reporting and while using our in-house mechanical and electrical capability supports productive delivery and also allows maintenance and operation long after completion of the build. We've also led innovation through our digital twin Pathfinder project, taking a digital approach to both construction and operation allows us to share critical information on the buildings assets, supporting facilities management and helping an operator understand a building's impact from reducing energy usage or costs or even the impact of temperature has on an end user's behavior. This represents a groundbreaking intelligent whole-of-life approach to buildings and their management, which we are looking to apply across Kier and our other clients. The evolution of our design and expertise has allowed us to win a project valued at circa GBP 700 million, namely HMP Glasgow. I wanted to end by going back to our integrated 360 approach to underline the breadth of our capabilities that drive these synergies across the group. We use those synergies to drive improved output outcomes for clients, customers, people, places and planet. And our holistic end-to-end capability is a true differentiator for Kier. Ultimately, this approach underlines why we are a partner of choice for our clients and customers and is how we deliver increased margins and consistent sustainable growth for our shareholders. Thank you.