Q4 2026 Kier Group PLC Earnings Call

September 15, 2026

Stuart Togwell: Okay. Good morning, everyone. Tom and I are excited to be taking you through an excellent set of results and introducing our new strategy. Welcome to you all, be it those here in person or online. I am delighted also to be joined by members of our executive team, as these results and strategy are, of course, a team effort. I am proud to be leading Kier at this time and excited about how we shift from recovery to value creation. Good morning. Last year, I spoke about the need for Kier to evolve. This year, I want to show how far we have progressed and how that progress puts us in a strong position to deliver consistent, sustainable growth. It was really important to me, as the new Chief Exec, that we delivered on 2026 as we evolved, and we did.

Speaker #1: Okay, good morning, everyone. Tom and I are excited to be taking you through an excellent set of results and introducing our new strategy. Welcome to you all, whether you're here in person or joining us online.

Speaker #1: And I'm delighted also to be joined by members of our executive team, as these results and strategy are, of course, a team effort. I'm proud to be leading here at this time and excited about how we shift from recovery to value creation.

Speaker #1: Good morning. Last year, I spoke about the need for care to evolve. This year, I want to show how far we have progressed, and how that progress puts us in a strong position to deliver consistent, sustainable growth.

Speaker #1: It was really important for me, as a new chief exec, that we delivered on '26 as we evolved. And we did. Kier delivered both a strong '26 performance.

Stuart Togwell: Kier delivered both a strong 2026 performance, revenue up 7.5%, adjusted operating profit up by 6.7%, framework access up by GBP 50 billion, and monthly net cash up GBP 60 million. We did that whilst we evolved into a simpler business model through the seamless transition of two divisions into one infrastructure powerhouse and the adoption of our Justice blueprint into defense and health. A new management team is in place whilst we delivered average net cash for the first time in a decade and strengthened our cyber protection and digital capability, all of which I believe are increasingly important in the delivery of sustainable growth. Kier is being recognized externally for its leading performance, including social value and creating employment, and being reported as one of the best places to work.

Speaker #1: Revenue up 7.5%. Adjusted operating profit up by 6.7%. Framework access up by $50 billion. Monthly net cash up $60 million. We did that whilst we evolved into a simpler business model.

Speaker #1: Through the seamless transition of two divisions into one infrastructure powerhouse, and the adoption of our Justice Blueprint into defense and health, a new management team is in place. Meanwhile, we delivered average net cash for the first time in a decade.

Speaker #1: And strengthened our cyber protection and digital capability. All of which, I believe, are increasingly important in the delivery of sustainable growth. Now, Kier is being recognized externally for its leading performance, including social value.

Speaker #1: And creating employment, and being reported as one of the best places to work. Finally, to deliver this level of change, and to report that FY27 earnings are expected to be at the top end of the Board's prior expectations.

Stuart Togwell: Finally, to deliver this level of change and to report that 2027 earnings are expected to be at the top end of the board's prior expectations is outstanding and why I am confident this team can deliver on our new strategy. The scale of opportunity in economic and social infrastructure, delivered through longstanding customers who value Kier's capability, represents a compelling opportunity to drive long-term value for the group. To capitalize on this, we have identified three strategic priorities. Growth. There is a generational significant investment cycle in UK infrastructure, supported by strong underlying trends across markets. We are simplifying the business to focus on our core infrastructure and construction divisions to capture that opportunity. In terms of resilience, our customer mix, disciplined bidding, and approach to risks contributed to our milestone net cash position in FY26.

Speaker #1: It is outstanding, and that's why I'm confident this team can deliver on our new strategy. The scale of opportunity in economic and social infrastructure is delivered through longstanding customers.

Speaker #1: Who values Care's capability. This represents a compelling opportunity to drive long-term value for the Group. To capitalize on this, we've identified three strategic priorities: growth.

Speaker #1: There is a generational, significant investment cycle in UK infrastructure, supported by strong underlying trends across markets. So, we are simplifying the business to focus on our core infrastructure and construction divisions.

Speaker #1: To capture that opportunity. In terms of resilience, our customer mix, disciplined bidding, and approach to risk contributed to our milestone net cash position in Q4 '26.

Speaker #1: And we will continue to strengthen the balance sheet, targeting more than £200 million of average net cash by FY29. Performance: a simplified model at scale, with a stronger balance sheet.

Stuart Togwell: And we will continue to strengthen the balance sheet, targeting more than GBP 200 million of average net cash by FY29. Performance. A simplified model at scale with a stronger balance sheet and productivity will deliver a medium-term plan of mid-single-digit revenue growth at a margin of 4% to 4.5% and a double-digit EPS CAGR. I will say that again, and a double-digit EPS CAGR. Before going further, there is an important strategic decision regarding our property business that I want to share with you. We have decided not to invest in new property developments, and instead, as each existing development comes to market, we will return capital to the group's balance sheet. This will be managed through a run-off process, balancing timing and value realization. I will return shortly to provide more detail on the strategic rationale for the property capital reallocation and discuss our strategy.

Speaker #1: And productivity. We'll deliver a medium-term plan: mid-single-digit revenue growth, at a margin of 4 to 4.5%, and a double-digit EPS CAGR. I'll say that again.

Speaker #1: And a double-digit EPS CAGR. Before going further, there is an important strategic decision regarding our property business that I want to share with you.

Speaker #1: We have decided not to invest in new property developments, and instead, as each existing development comes to market, we will return capital to the Group’s balance sheet.

Speaker #1: This will be managed through a runoff process, balancing time and value realization. I will return shortly to provide more detail on the strategic rationale for the property capital reallocation.

Speaker #1: And discuss our strategy. But first, hopefully Tom can stand. I will hand over to Tom to take you through the full year '26 financial highlights.

Stuart Togwell: But first, hopefully Tom can stand. I will hand over to Tom to take you through the FY26 financial highlights. Good luck, Tom.

Speaker #1: Good luck, Tom.

Speaker #2: Good morning, all. I'm delighted to be presenting Kier's full year 2026 financial highlights. It's been an excellent year for Kier, in which we've delivered strong growth in revenue and profits.

Tom Hinton: Good morning, all. I am delighted to be presenting Kier's FY26 financial highlights. It has been an excellent year for Kier, in which we have delivered strong growth in revenue and profits and continued order book momentum and a full-year average net cash position. I am going to go into all of these in more detail now. Revenue in FY26 grew to GBP 4.4 billion. It is up 7.5% on the prior year, and it is continuing a strong period of successive year-on-year growth in our top line, which has seen Kier's revenue grow by a third since 2022. You can see the top left-hand box here. High quality profitable growth is underpinned by a high quality, well bid, and commercially selective order book. As such, we are pleased to see continued momentum as a measure, which grew 8.2% year-on-year. It is now a record GBP 11.9 billion as of 30 June.

Speaker #2: And continued all about momentum and a full-year average net cash position. I'm going to go into all of these in more detail now.

Speaker #2: Revenue in FY26 grew to £4.4 billion, up 7.5% on the prior year. This continues a strong period of successive year-on-year growth in our top line.

Speaker #2: This has seen Kier's revenue grow by a third since 2022. You can see this in the top left-hand box here. High-quality, profitable growth is underpinned by a high-quality, well-bid, and commercially selective order book.

Speaker #2: So, as such, we continue to see momentum in this measure, which grew 8.2% year-on-year. It's now a record £11.9 billion as of the 30th of June.

Tom Hinton: It is now a record GBP 11.9 billion as of 30 June. This order book growth is a direct result of Kier's leading positions across more than 120 frameworks. It is a particular strength of Kier, and Stuart will bring it to life later. Casting your eye now down to the bottom three boxes, you can see the quality of Kier's recent growth with strong flow-through of revenue to adjusted operating profit and then to EPS. So we have an AOP of GBP 170 million in FY26, representing a 6.7% increase year over year. We consolidated our AOP margin of 3.9% and subsequently adjusted EPS grew by 8.8%, reflecting both the strong operational performance and the impact of the two recent share buyback programs. Our revenue and profit growth is also felt in our cash position, where the strong cash generation is a defining characteristic of this business.

Speaker #2: This order book growth is a direct result of Kier's leading positions across more than 120 frameworks. It's a particular strength of Kier, and Stewart will bring it to life later.

Tom Hinton: This order book growth is a direct result of Kier's leading positions across more than 120 frameworks. It is a particular strength of Kier, and Stuart will bring it to life later. Casting your eye now down to the bottom three boxes, you can see the quality of Kier's recent growth with strong flow-through of revenue to adjusted operating profit and then to EPS. So we have an AOP of GBP 170 million in FY26, representing a 6.7% increase year over year. We consolidated our AOP margin of 3.9% and subsequently adjusted EPS grew by 8.8%, reflecting both the strong operational performance and the impact of the two recent share buyback programs. Our revenue and profit growth is also felt in our cash position, where the strong cash generation is a defining characteristic of this business.

Speaker #2: Casting your eye now down to the bottom three boxes, you can see the quality of care's recent growth, with strong flow-through of revenue to adjusted operating profit and then to earnings per share.

Speaker #2: So, we have an AOP of £170 million in FY26, representing a 6.7% increase year over year. We consolidated our AOP margin at 3.9%, and subsequently, adjusted EPS grew by 8.8%.

Speaker #2: Reflecting both the strong operational performance and the impact of the two recent share buyback programs, our revenue and profit growth is also felt in our cash position.

Speaker #2: Strong cash generation is a defining characteristic of this business. During FY26, we generated £266 million of operating free cash flow and £165 million of free cash flow.

Tom Hinton: During FY26, we generated GBP 206 million of operating free cash flow and GBP 165 million of free cash flow, which represented a year-on-year increase of 6.2%. And it is this cash generative nature of the business which has allowed us to further strengthen the balance sheet and distribute capital to shareholders. Since 2022, Kier has generated more than GBP 650 million of free cash flow. And it is this free cash flow that has been fundamental to the sustained improvement in the group's average net cash position, which has been transformed over recent years from a significant net debt position to a positive and growing net cash position. The group achieved an average month-end net cash position of GBP 11 million in FY26, up GBP 60 million from an average net debt position in FY25.

Speaker #2: This represented a year-on-year increase of 6.2%. It's this cash-generative nature of the business which has allowed us to further strengthen the balance sheet.

Speaker #2: And distribute capital to shareholders. Since 2022, Kier has generated more than £650 million of free cash flow. And it’s this free cash flow that’s been fundamental to the sustained improvement in the Group’s average net cash position.

Speaker #2: Which has been transformed over recent years from a significant net debt position to a positive and growing net cash position. The Group achieved an average month-end net cash position of £11 million.

Speaker #2: In FY26, up £60 million from an average net debt position in FY25. And alongside this sustained strengthening of our balance sheet, we have maintained and enhanced shareholder distributions through the dividend and share buyback program.

Tom Hinton: And alongside this sustained strengthening of our balance sheet, we have maintained and enhanced shareholder distributions through the dividend and share buyback program. I am pleased to announce the board has approved the final dividend of 5.2 pence per share, taking the full year dividend to 7.8 pence. It is an 8.3% increase on FY25. During the year, we concluded the group's first GBP 20 million share buyback. We purchased just under 11 million shares within the 20 million allocation. In March, we launched a second GBP 25 million buyback, which as of 30 June, has seen just under 4 million shares repurchased. We expect the program to be completed by the end of calendar year 2026. We continue to see share buybacks as an important option for enhancing shareholder returns. We will cover that approach to capital allocation a little bit later in the presentation.

Speaker #2: I'm pleased to announce the Board has approved a final dividend of 5.2 pence per share, taking the full year dividend to 7.8 pence. This is an 8.3% increase on FY25.

Speaker #2: During the year, we concluded the group's first £20 million share buyback, purchasing just under 11 million shares within the £20 million allocation.

Speaker #2: And in March, we launched a second £25 million buyback, which, as of the 30th of June, has seen just under 4 million shares repurchased.

Speaker #2: We expect the program to be completed by the end of calendar year 2026. We continue to see share buybacks as an important option for enhancing shareholder returns.

Speaker #2: We'll cover that approach to capital allocation a little bit later in the presentation. Now, staying on cash, let's dive into it in a little bit more detail.

Tom Hinton: Now staying on cash, let us dive into it in a little bit more detail. The group's closing cash stood at GBP 232 million, the right block, at 30 June. A year-on-year increase of 14%. I will walk through from left to right and pull out a few of the key drivers which have contributed to this strong year-end cash position. Firstly, the group produced GBP 106 million of operating free cash flow. It is a cash conversion yield of 121%, well ahead of our 90% target of operating free cash flow conversion. The strong cash performance was driven by GBP 236 million of EBITDA and a small working capital inflow of GBP 10 million. Less around GBP 65 million of CapEx, which includes the capital payments on finance leases. After net interest payments of 33 and the tax payments of GBP 8 million, the group generated free cash flow of GBP 165 million.

Speaker #2: So the group's closing cash stood at £232 million on the right block at 30th June, a year-on-year increase of 14%. So I'll walk through from left to right.

Speaker #2: And pull out a few of the key drivers which have contributed to this strong year-end cash position. So, firstly, the group produced £106 million of operating free cash flow.

Speaker #2: So, cash conversion yield of 121%—well ahead of our 90% target for operating free cash flow conversion. The strong cash performance was driven by £236 million of EBITDA.

Speaker #2: And a small working capital inflow of £10 million. Less around £65 million of capex, which includes the capital payments on finance leases. After the net interest payments of £33 million and the tax payments of £8 million.

Tom Hinton: After net interest payments of 33 and the tax payments of GBP 8 million, the group generated free cash flow of GBP 165 million. Our adjusting items here relate to fire and cladding remediation costs, which are in line with our expectations and previous guidance. You can see in FY26, we invested GBP 22 million in our property JV businesses, down from GBP 51 million in FY25. Next step along, you see we paid cash dividends of GBP 34 million during the period, and then GBP 22 million of share buybacks, which as mentioned, included the completion of the first 20 million and the commencement of the latest GBP 25 million share buyback program, which we launched in March.

Speaker #2: The Group generated free cash flow of £165 million. Our adjusting items here relate to fire and cladding remediation costs, which are in line with our expectations and previous guidance.

Tom Hinton: Our adjusting items here relate to fire and cladding remediation costs, which are in line with our expectations and previous guidance. You can see in FY26, we invested GBP 22 million in our property JV businesses, down from GBP 51 million in FY25. Next step along, you see we paid cash dividends of GBP 34 million during the period, and then GBP 22 million of share buybacks, which as mentioned, included the completion of the first 20 million and the commencement of the latest GBP 25 million share buyback program, which we launched in March. At the H1, I was pleased to report an average net cash position for the first six months of FY26, and I am delighted to announce that for the full year, we achieved an average net cash position of GBP 11 million. It is a significant milestone for the group.

Speaker #2: You can see in FY26, we invested £22 million in our property JV businesses, down from £51 million in FY25. Next step along, you see we paid cash dividends of £34 million during the period.

Speaker #2: And then £22 million of share buybacks, which, as mentioned, included the completion of the first £20 million and the commencement of the latest £25 million share buyback program, which we launched in March.

Speaker #2: So at the half year, I was pleased to report an average net cash position for the first six months of FY26. And I'm delighted to announce that for the full year, we achieved an average net cash position of £11 million.

Tom Hinton: At the H1, I was pleased to report an average net cash position for the first six months of FY26, and I am delighted to announce that for the full year, we achieved an average net cash position of GBP 11 million. It is a significant milestone for the group. The first time since 2012 that the group has achieved an average month-end net cash position for the full year. This transformation of the group's financial position from net debt to net cash has only been made possible by the quality of our core divisions, which have track records of multi-year growth and high levels of cash generation.

Speaker #2: It's a significant milestone for the group—the first time since 2012 that the group has achieved an average month-end net cash position for the full year.

Tom Hinton: The first time since 2012 that the group has achieved an average month-end net cash position for the full year. This transformation of the group's financial position from net debt to net cash has only been made possible by the quality of our core divisions, which have track records of multi-year growth and high levels of cash generation. I will now turn to look at the FY26 performance by division. As you can see, our core powerhouse businesses of Infrastructure and Construction both demonstrate strong momentum. Infrastructure delivered an excellent performance in FY26, with 10% growth in revenues and 16% increase in adjusted operating profit, representing an AOP margin of 5.5%, up 30 basis points on FY25. This standout performance was led by our Water business, which continues to benefit from the ramp-up of the AMP8 investment cycle.

Speaker #2: This transformation of the group's financial position, from net debt to net cash, has only been made possible by the quality of our core divisions.

Speaker #2: These have track records of multi-year growth and high levels of cash generation. So, I'll now turn to look at the FY26 performance by division.

Tom Hinton: I will now turn to look at the FY26 performance by division. As you can see, our core powerhouse businesses of Infrastructure and Construction both demonstrate strong momentum. Infrastructure delivered an excellent performance in FY26, with 10% growth in revenues and 16% increase in adjusted operating profit, representing an AOP margin of 5.5%, up 30 basis points on FY25. This standout performance was led by our Water business, which continues to benefit from the ramp-up of the AMP8 investment cycle.

Speaker #2: So, as you can see, our core powerhouse businesses of Infrastructure and Construction both demonstrate strong momentum. Infrastructure delivered an excellent performance in FY26, with 10% growth in revenues and a 16% increase in adjusted operating profit.

Speaker #2: Representing an IOP margin of 5.5%, up 30 basis points on FY25. The standout performance was led by our Water business, which continues to benefit from the ramp up of the AMP8 investment cycle.

Speaker #2: Alongside this, there has been good performance in Rail as the sector transitions to Control Period 7. Construction delivered a strong performance in FY26, reaching nearly £2 billion of revenues.

Tom Hinton: Alongside this is a good performance in rail as the sector transitions to Control Period 7. Construction delivered a strong performance in FY26, reaching nearly GBP 2 billion in revenues, up 4% year-on-year, and maintaining its top-end industry margin of 3.9%. The business benefited from a H2 that saw the ramp-up of work at HMP Glasgow to full delivery phase. Our regionally focused businesses continue to build on their market positions, particularly in the education and defense, where our framework positions are critical for success. As Stuart will talk more about the breadth of capability and credentials in that segment in a moment. Turning now to our property business, this continued to be impacted by a subdued market, reflecting the wider macroeconomic turbulence, as the division generated revenue of GBP 63 million, AOP of GBP 9 million, a ROCE of 4.3%.

Speaker #2: Up 4% year on year, and maintaining its top-end industry margin of 3.9%. The business benefited from a second half that saw the ramp-up of work at HIP Glasgow.

Speaker #2: To full delivery phase. Our regionally focused businesses continue to build on their market positions, particularly in education and defense, where our framework positions are critical for success.

Speaker #2: As Stuart will talk more about the breadth of capability and credentials in that segment in a moment, turning now to our property business, this continued to be impacted by a subdued market.

Speaker #2: Reflecting the wider macroeconomic turbulence, the division generated revenue of £63 million, IOP of £9 million, and a ROKI of 4.3%. And against this challenging backdrop...

Tom Hinton: Against this challenging backdrop, the business has made good operational progress during the year. Planning has been secured on around 80% of projects, including around 5,000 residential units. We secured tenancy or actively marketing on four projects, including 270 residential units that are pre-funded. As we progress into the Q1 fiscal year, we are seeing continued strong momentum, and I am pleased to provide the following outlook and guidance for FY27. Recent significant contract awards and continued growth in the group's order book and further expansion of our pipeline gives us a high degree of visibility into FY27. As such, we have got confidence in FY27 adjusted EPS, and we will be at the top end of the board's expectations. Moving now to our strategy.

Speaker #2: The business has made good operational progress during the year. Planning has been secured on around 80% of projects, including around 5,000 residential units. We secured tenancy.

Speaker #2: We're actively marketing four projects, including 270 residential units that are pre-funded. As we progressed into the first quarter of the fiscal year, we're seeing continued strong momentum.

Speaker #2: And I'm pleased to provide the following outlook and guidance for FY27: recent significant contractor awards, continued growth in the Group's order book, and further expansion of our pipeline.

Speaker #2: This gives us a high degree of visibility into FY27. As such, we've got confidence in FY27 adjusted earnings per share, and will be at the top end of the Board's expectations.

Speaker #2: Now, moving to our strategy. Stuart has already laid out, in broad terms, the direction we're taking in regards to property. I'll now hand back to him.

Tom Hinton: Stuart has already laid out in broad terms the direction we are taking in regards to property, and I will now hand back to him and cover in more detail the rationale and the roadmap for realizing and reallocating the capital currently invested in the portfolio.

Speaker #2: And cover in more detail the rationale and the roadmap for realizing and reallocating the capital currently invested in the portfolio.

Speaker #3: Thank you. There are some seats at the front, if anyone wants to take them. Okay. Okay. So, next slide, please. Thank you. Thanks, Tom.

Stuart Togwell: There are some seats at the front if anyone wants to take them. Okay. Okay, next slide, please. Thank you. Thanks, Tom. Let us return now to the three strategic priorities I outlined earlier, which underpin our approach to long-term value creation. To focus on growth in our core businesses, further strengthen the resilience of our balance sheet, and drive performance through double-digit EPS growth. Just turning to property, the decision we have taken on property directly supports these priorities. It does allow us to focus resources on our core growth businesses, where we see the strongest opportunities to create long-term value, namely infrastructure and construction. As capital is returned from the existing property portfolio, it will strengthen the balance sheet, and over time will also reduce the impact of more volatile transaction-led earnings and give us greater optionality over future capital allocation decisions.

Speaker #3: Let's return now to the three strategic priorities I outlined earlier, which underpin our approach to long-term value creation: to focus on growth in our core businesses.

Speaker #3: Further strengthen the resilience of our balance sheet, and drive performance through double-digit EPS growth. Just turning to property, the decision we have taken on property directly supports these priorities.

Speaker #3: It does allow us to focus resources on our core growth businesses, where we see the strongest opportunities to create long-term value—namely, infrastructure and construction.

Speaker #3: As capital is returned from the existing property portfolio, it will strengthen the balance sheet and, over time, will also reduce the impact of more volatile, transactionally led earnings.

Speaker #3: And give us greater optionality over future capital allocation decisions. In terms of timing, I can confirm the following: from this point, we will not invest in any new property developments.

Stuart Togwell: In terms of timing, I can confirm the following. From this point, we will not invest in any new property developments. Existing programs will continue to be delivered as planned, working with our partners to protect value and ensure continuity. As a result, total capital employed in property is expected to peak in December this year. We then expect to realize approximately the first GBP 150 million of capital over the next three years as individual developments mature and come to market, with that capital reallocated to further strengthen the group's balance sheet. I return now to focus on one of our three priorities. That is growth. Before Tom will elaborate further on resilience and performance. Well, I am confident in our ability to grow. We now have two powerhouse divisions in Infrastructure and Construction, both with the scale, capability, and market positions to capture the opportunities ahead.

Speaker #3: Existing programs will continue to be delivered as planned. We are working with our partners to protect value and ensure continuity. As a result, total capital employed in property is expected to peak in December this year.

Speaker #3: We then expect to realize approximately the first £150 million of capital over the next three years, as individual developments mature and come to market.

Speaker #3: With that capital reallocated to further strengthen the group's balance sheet, I'll return now to focus on one of our three priorities—that's growth—before Tom elaborates further on resilience and performance.

Speaker #3: So, why am I confident in our ability to grow? Well, we now have two powerhouse divisions in Infrastructure and Construction, both with the scale, capability, and market positions.

Speaker #3: To capture the opportunities ahead, they are operating from an established platform that is already growing, with existing customer relationships and long-term framework positions. We already have three years of work through our order book.

Stuart Togwell: They are operating from an established platform that is already growing with existing customer relationships and long-term framework positions. We already have three years of work through our order book and PCSA and ECIs, secured on the same disciplined approach to risks that has underpinned our recent performance. We are active in sectors where there is clear visibility of work over, I think, the next 10 to 15 years, giving us confidence in the depth and duration of the opportunity. Four of our existing sectors, water, energy, defense, and healthcare, provide material opportunities for growth, supported by structural demand and Kier's proven delivery capability and comfortably cover any rundown from HS2 and Justice. Just turning to water in a bit more detail. We are aiming to double our existing revenue from GBP 400 million to GBP 800 million by 2029.

Speaker #3: And PCSA and ECIs, secured on the same disciplined approach to risk that has underpinned our recent performance. We are active in sectors where there is clear visibility of work.

Speaker #3: Over, I think, the next 10 to 15 years, giving us confidence in the depth and duration of the opportunity across four of our existing sectors.

Speaker #3: Water, energy, defense, and healthcare provide material opportunities for growth, supported by structural demand and Kier’s proven delivery capability, and comfortably cover any rundown from HS2 and Justice.

Speaker #3: Just turning to water in a bit more detail. We are aiming to double our existing revenue from £400 million to £800 million by '29.

Speaker #3: We have strong visibility over a growing market for the next 15 years. Sorry, that is covered and underpinned by a position on 10 of the 12 major water frameworks.

Stuart Togwell: We have strong visibility over a growing market for the next 15 years. That coverage is underpinned by a position on 10 of the 12 major water frameworks, long-standing relationships with the Environment Agency and the Canal & River Trust, and hard-to-replicate credentials in the sector. Definitely, the structural trends are clearly supportive, even before allowing for potential AMP9 growth and major projects such as the strategic reservoir options. Our order book has grown to GBP 1.4 billion. We have visibility over GBP 3.5 billion of additional work in our pipeline. We have a strong delivery platform with around 140 live projects, more than 100 projects in early contractor involvement, and we have approximately 150 in-house water and mechanical and electrical specialists. In energy, we are aiming to more than double our existing revenue from GBP 170 million to GBP 400 million by 2029.

Speaker #3: Longstanding relationships with the Environmental Agency and the Canal & River Trust, and hard-to-replicate credentials in the sector. Definitely, the structural trends are clearly supportive.

Speaker #3: Even before allowing for potential AMP9 growth, and major projects such as the strategic reservoir options, our order book has grown to £1.4 billion. We have visibility over £3.5 billion of additional work in our pipeline.

Speaker #3: We have a strong delivery platform, with around 140 live projects and more than 100 projects in early contractor involvement. We also have approximately 150 in-house water and mechanical specialists.

Speaker #3: And electrical specialists in energy. We are aiming to more than double our existing revenue, from £170 million to £400 million by 2029. Energy is a multi-decade growth sector.

Stuart Togwell: Energy is a multi-decade growth sector, and Kier has hard-to-replicate credentials that position us well to capture that opportunity. Our growth currently is supported by the nuclear work visible within our order book of GBP 680 million, GBP 3 billion of frameworks, and GBP 900 million of pipeline opportunities. There is further opportunity beyond that with the current quoted, and those quoted figures, including Sizewell C and STEP, and additional revenue I expect from complementary capability across Construction and Facilities Management. This is a market with high barriers to entry, driven by the key credentials of a suitably qualified and experienced person, of which Kier have more than 400 in-house people. The STEP Fusion program was a massive win for us because it demonstrates our ability to act as a strategic delivery partner on nationally important mega projects.

Speaker #3: And Kier has hard-to-replicate credentials. That positions us well to capture that opportunity. Our growth currently is supported by the nuclear work, which is visible within our order book of £680 million.

Speaker #3: £3 billion of frameworks, and £900 million of pipeline opportunities. There is further opportunity beyond that, with a current quoted—sorry—and those quoted figures.

Speaker #3: Including size, well, sea, and step, and additional revenue I expect from complementary capability across construction and facilities management. This is a market with high barriers to entry.

Speaker #3: Driven by the key credentials of a suitably qualified, experienced person, of which Kier have more than 400 in-house people. The step fusion program was a massive win for us.

Speaker #3: Because it demonstrates our ability to act as a strategic delivery partner on nationally important mega projects. Longer term, I'm confident we can leverage our capability.

Stuart Togwell: Longer term, I am confident we can leverage our capability to grow our share of other energy sectors, including transmission, resilience, decarbonisation, and battery storage. In defense, we are also aiming to more than double our existing revenue from GBP 150 million to GBP 350 million by 2029. Kier is strongly positioned to grow its share, supported by our frameworks with both the Ministry of Defence and defense primes over the next 10 years. Our 2029 revenue target is already supported by the current order book of GBP 300 million, the PCSAs of GBP 500 million, and GBP 11 billion of framework opportunities, of which we can already see GBP 7.1 billion of pipeline to bid. Our credentials, again, are hard to replicate, in particular in security, as more than 700 of our people have the necessary security clearance to work behind the line. And in our design, because of our recent awarded Secured by Design accreditation.

Speaker #3: To grow our share of other energy sectors, including transmission, resilience, decarbonization, and battery storage. In Defence, we are also aiming to more than double our existing revenue.

Speaker #3: From 150 to 350 million by '29. KIA is strongly positioned to grow its share, supported by our frameworks with both the MOD and defense primes.

Speaker #3: Over the next 10 years, our 2029 revenue target is already supported by the current order book of £300 million and PCSAs of £500 million.

Speaker #3: And £11 billion of framework opportunities, of which we can already see £7.1 billion in the pipeline to bid. Our credentials, again, are hard to replicate.

Speaker #3: In particular, in security, as more than 700 of our people have the necessary security clearance to work behind the line and in our design.

Stuart Togwell: And in our design, because of our recent awarded Secured by Design accreditation. I am confident growth in a sector that has been previously hard to grow because the new Ministry of Defence alliances are adopting principles from our Justice blueprint. Looking ahead, defense represents a very significant further opportunity across both infrastructure and construction, including facilities management. Bless you. Okay. In healthcare, we are aiming to grow by 50%, from GBP 170 million to GBP 250 million by 2029. Healthcare represents at least a 10-year opportunity, and we are well-positioned through our role as an alliance partner on key frameworks. Because of this, we can see further growth coming after 2029 from our order book of GBP 600 million, framework access of GBP 57 billion, and known pipeline currently of GBP 12 billion.

Speaker #3: Because of our recent awarded Secure by Design accreditation, I'm confident in growth in the sector that has been previously hard to grow. This is because the new MOD alliances are adopting principles from our justice blueprint.

Stuart Togwell: I am confident growth in a sector that has been previously hard to grow because the new Ministry of Defence alliances are adopting principles from our Justice blueprint. Looking ahead, defense represents a very significant further opportunity across both infrastructure and construction, including facilities management. Bless you. Okay. In healthcare, we are aiming to grow by 50%, from GBP 170 million to GBP 250 million by 2029. Healthcare represents at least a 10-year opportunity, and we are well-positioned through our role as an alliance partner on key frameworks. Because of this, we can see further growth coming after 2029 from our order book of GBP 600 million, framework access of GBP 57 billion, and known pipeline currently of GBP 12 billion. Again, our technical expertise is hard to replicate. In particular, I would point to our in-house M&E and hospital FM capability. Both are differentiators in this sector. Hinchingbrooke Hospital is a good example of this.

Speaker #3: Looking ahead, defense represents a very significant further opportunity across both infrastructure and construction, including facilities management. (Bless you.) In healthcare, we are aiming to grow.

Speaker #3: By 50%—from 170 million to 250 million, by 29. Healthcare represents at least a 10-year opportunity, and we are well positioned for our role.

Speaker #3: As an alliance partner on key frameworks. Because of this, we can see further growth coming after '29 from our order book of £600 million.

Speaker #3: Framework access of £57 billion, and a known pipeline currently of £12 billion. Again, our technical expertise is hard to replicate. In particular, I'd point to our in-house M&E.

Stuart Togwell: Again, our technical expertise is hard to replicate. In particular, I would point to our in-house M&E and hospital FM capability. Both are differentiators in this sector. Hinchingbrooke Hospital is a good example of this. We targeted and secured the opportunity for a new hospital because of our existing FM contract performance with that hospital. Now, just moving on to differentiators. Many of you in this room have asked me over the last year what really differentiates Kier. Today, I want to set out the strengths I believe already distinguish us before going through a few of them in a bit more detail. Kier has a best-in-class capability in securing renewing frameworks across the UK.

Speaker #3: And hospital FM capability—both are differentiators in this sector. Hinterbrook Hospital is a good example of this. We targeted and secured the opportunity for a new hospital.

Stuart Togwell: We targeted and secured the opportunity for a new hospital because of our existing FM contract performance with that hospital. Now, just moving on to differentiators. Many of you in this room have asked me over the last year what really differentiates Kier. Today, I want to set out the strengths I believe already distinguish us before going through a few of them in a bit more detail. Kier has a best-in-class capability in securing renewing frameworks across the UK. This framework strength underpins the quality and visibility of our order book and pipeline and gives me confidence that growth will continue to be secured with the same disciplined approach to risk. Of the GBP 200 billion of frameworks available to us, this slide shows that a substantial proportion of these are aligned to our key sectors, importantly, including the areas where we foresee the strongest growth opportunities.

Speaker #3: Because of our existing FM contract performance with that hospital. Now, just moving on to differentiators. Many of you in this room have asked me over the last year.

Speaker #3: What really differentiates Kier? So today, I want to set out the strengths I believe already distinguish us, before going through a few of them in a bit more detail.

Speaker #3: Kier has a best-in-class capability in securing and renewing frameworks across the UK. This framework strength underpins the quality and visibility of our order book.

Stuart Togwell: This framework strength underpins the quality and visibility of our order book and pipeline and gives me confidence that growth will continue to be secured with the same disciplined approach to risk. Of the GBP 200 billion of frameworks available to us, this slide shows that a substantial proportion of these are aligned to our key sectors, importantly, including the areas where we foresee the strongest growth opportunities.

Speaker #3: And pipeline. And it gives me confidence that growth will continue to be secured, with the same disciplined approach to risk. Of the £200 billion of frameworks available to us.

Speaker #3: This slide shows that a substantial proportion of these are aligned to our key sectors, importantly including the areas where we have seen the strongest growth opportunities.

Speaker #3: I also expect, in time, that central and regional frameworks will become increasingly important procurement routes after devolution. I wanted to bring our national scale and coverage to life.

Stuart Togwell: I also expect in time that central and regional frameworks to become increasingly important procurement routes after devolution. I wanted to bring our national scale and coverage to life. Our model gives us the breadth of resources and capability to meet customer needs across the UK. Our national approach provides consistent delivery, while our local presence gives us the insight and relationships needed to meet customers' social value priorities. We can also move resources quickly to where demand is strongest, giving customers confidence that we can respond at scale. In many regions, the scale of our local business is larger than the total revenue of some of our competitors, which gives us both reach and resilience. Moving on to end-to-end capability. Delivering value for money and social value are becoming an increasingly important priority for our customers.

Speaker #3: Our model gives us the breadth of resources and capability to meet customer needs across the UK. Our national approach provides consistent delivery, while our local presence gives us the insight and relationships.

Speaker #3: Needed to meet customers' social value priorities. We can also move resources quickly to where demand is strongest, giving customers confidence that we can respond at scale.

Speaker #3: In many regions, the scale of our local business is larger than the total revenue of some of our competitors, which gives us both reach and resilience.

Speaker #3: Moving on to end-to-end capability. Delivering value for money and social value are becoming an increasingly important priority for our customers. Kier is good at this.

Stuart Togwell: Kier is good at this because we can draw on our end-to-end capability at scale across the UK. The metrics on this slide demonstrate our breadth and depth. 800 people in design, more than 400 projects delivering GBP 4.3 billion of revenue, and our facilities management business. This combined capability allows us to co-create solutions with customers that deliver outcome-led results. I would like to highlight the pre-construction phase because this is where we shine by shaping the right solution with customers, aligning scope, risk, and value, and setting projects up for successful delivery. Finally, I wanted to highlight our culture because it is one of Kier's most important differentiators. Our connected, high-performing culture enables us to attract, develop, and retain the talent we need to deliver the opportunities ahead.

Speaker #3: Because we can draw on our end-to-end capability at scale across the UK. The metrics on this slide demonstrate our breadth and depth.

Speaker #3: We have 800 people in design, and more than 400 projects delivering £4.3 billion of revenue. And our facilities management business — this combined capability allows us to co-create solutions.

Speaker #3: With customers that deliver outcome-led results, I would like to highlight the pre-construction phase, because this is where we shine—by shaping the right solution with customers.

Speaker #3: Aligning scope, risk, and value, and setting projects up for successful delivery. Finally, I wanted to highlight our culture, because it is one of Kier's most important differentiators.

Speaker #3: Our connected, high-performing culture enables us to attract, develop, and retain the talent we need to deliver the opportunities ahead. It creates alignment across the business.

Stuart Togwell: It creates alignment across the business, supports disciplined execution, and gives our people a clear sense of purpose in the work we do for customers and communities across the UK. That culture is a genuine source of competitive advantage. It is built over time through consistent behaviors, strong relationships, and pride in delivery, and is not something that can be quickly or easily replicated. As we move into the next phase of growth, I believe it will be central to how we sustain performance and create long-term value. In short, our differentiators matter. Our national scale, regional presence, end-to-end capability, and connected high-performing culture gives us the agility to move resources to where demand is strongest, shape solutions, early win customers, sorry, early with customers, and continue to deliver with discipline as markets evolve.

Speaker #3: It supports disciplined execution and gives our people a clear sense of purpose in the work we do for customers and communities across the UK. That culture is a genuine source of competitive advantage.

Speaker #3: It is built over time, through consistent behaviors, strong relationships, and pride in delivery. It is not something that can be quickly or easily replicated.

Speaker #3: As we move into the next phase of growth, I believe it will be central to how we sustain performance and create long-term value.

Speaker #3: In short, our differentiators matter: our national scale, regional presence, end-to-end capability, and connected, high-performing culture. These give us the agility to move resources to where...

Speaker #3: Demand is strongest. Shape solutions. Early win customers—sorry, early with customers—and continue to deliver with discipline as markets evolve. We are also building differentiators for the future.

Stuart Togwell: We are also building differentiators for the future, in particular, naturally digital, which I will bring back to you later in the year. To bring this section together, I want to step back and just summarize why I am confident in the growth opportunity ahead of us. We are operating in markets with long-term structural demand, clear customer need. These are essential sectors for the UK, and they provide Kier with a significant, accessible, and enduring growth opportunity. That opportunity is reinforced by the strength of our framework positions. With access to around, I will say it again, GBP 200 billion of frameworks, just in case you missed it, which is substantially aligned to our key sectors.

Speaker #3: In particular, naturally digital, which I will bring back to you later in the year. So, to bring this section together, I want to step back.

Speaker #3: And just to summarize why I'm confident in the growth opportunity ahead of us: we are operating in markets with long-term structural demand and a clear customer need.

Speaker #3: These are essential sectors for the UK, and they provide Kier with a significant, accessible, and enduring growth opportunity. That opportunity is reinforced by the strength of our framework positions.

Speaker #3: With access to around—I'll say it again—£200 billion of frameworks, just in case you missed it, which is substantially aligned to our key sectors.

Speaker #3: It is also underpinned by favorable structural trends that are familiar to all of us, from the need for investment in water and energy to national security.

Stuart Togwell: It is also underpinned by favorable structural trends that are familiar to all of us, from the need for investment in water and energy to national security, healthcare capacity, and the wider renewal of UK economic and social infrastructure. The four sectors we have just discussed are expected to deliver around GBP 1 billion of revenue uplift over the next few years. Importantly, that growth is not dependent on a single market or a single client. It is supported by deep sector credentials, established customer relationships, disciplined bidding, and the ability to bring the breadth of Kier's capability to complex programs across the UK. That concludes my section on growth. I will now hand you back to Tom, who will take you through the two closely connected priorities that support and enable that growth, resilience and performance. Tom.

Speaker #3: Healthcare capacity, and the wider renewal of UK economic and social infrastructure. The four sectors we have just discussed are expected to deliver around £1 billion of revenue per year.

Speaker #3: Importantly, that growth is not dependent on a single market or a single client. It is supported by deep sector credentials, established customer relationships, and disciplined bidding.

Speaker #3: And the ability to bring the breadth of Kier's capability to complex programs across the UK. So that concludes my section on growth. I will now hand you back to Tom.

Speaker #3: Who will take you through the two closely connected priorities that support and enable that growth: resilience and performance. Tom.

Speaker #2: Thanks, Jet. So, Stuart's covered the growth pillar of our strategy—the extent of the opportunity ahead of us. I'm going to cover the other two pillars of our strategy.

Tom Hinton: Thanks, Stuart. Stuart's covered the growth pillar of our strategy, the extent of the opportunity ahead of us. I'm going to cover the other two pillars of our strategy, resilience and performance. Starting with resilience. What is it that gives us confidence in our ability to deliver sustainable growth? It's in part due to the optimal mix of work across our customer types, our contract approach, and our deep, long-term relationships. Firstly, our order book, which is building year on year and now stands at GBP 11.9 billion. The order book consists of either secured or probable work and gives us substantial visibility of not just the current year, but also the following year. That's before a considerable amount of the work, GBP 2 billion, of which are in one-to-one customer discussions, and that we expect to shortly join the order book.

Speaker #2: Resilience and performance. So, starting with resilience: what is it that gives us confidence in our ability to deliver sustainable growth? And it's, in part,

Speaker #2: Due to the optimal mix of work across our customer types, our contract approach, and our deep, long-term relationships. So, firstly, our order book.

Speaker #2: Which is building year on year, and now stands at £11.9 billion. The order book consists of either secured or probable work, and gives us substantial visibility.

Speaker #2: Of not just the current year. But also the following year. And that's before a considerable amount of the work. 2 billion pounds. Of which are in 1 to 1 customer discussions.

Speaker #2: And that we expect to shortly join the order book. In fact, the £500 million Hinchingbrooke Hospital award is one example that just missed the June order book cutoff.

Tom Hinton: In fact, the GBP 500 million Hinchingbrooke Hospital award is one example that just missed the June order book cutoff. Our order book gives us confidence in FY27 revenues, with 95% cover for the following financial year. In fact, the construction business is at over 100%, sorry, it's at 100% cover for the coming 12 months. Didn't give you an extra target there, Martin. It's a great position for the business to be in. Moreover, more than 90% of the group's revenues come from repeat business, reflecting Kier's excellent customer delivery. In terms of the quality of our work, our commercial discipline means that 95% of our project revenues are now governed by contracts that are either cost-plus, where all costs are passed directly on to the customer, or two-stage, where the opportunity for renegotiation protects our margin.

Speaker #2: So, our order book gives us confidence in FY27 revenues, with 95% cover for the following financial year. And, in fact, the construction business is at—.

Speaker #2: Over 100%. Sorry, it's at 100% cover for the coming 12 months. Didn't give you an extra target there, Martin. It's a great position for the business to be in.

Speaker #2: Moreover, more than 90% of the group's revenues come from repeat business, reflecting Kier's excellent customer delivery. Now, in terms of the quality of our work.

Speaker #2: Our commercial discipline means that 95% of our project revenues are governed by contracts that are either cost plus, where all costs...

Speaker #2: Are passed directly off to the customer, or two-stage, where the opportunity for renegotiation protects our margin. This is, of course, a material improvement on where we were commercially.

Tom Hinton: This is, of course, a material improvement on where we were commercially just a few years ago. Lastly, in terms of assurance, almost 90% of our customers are either public sector or they're regulated entities, as you can see on the right-hand side of the slide, removing much of the commercial volatility from our portfolio. Still on the topic of resilience, let's look at how much capital we expect to generate in the next three years from our underlying cash flow. In the period FY27 to FY29, we're targeting cumulative operating free cash flow of GBP 600 to 700 million on the left. During that same three-year period, we expect to realize net capital of around 150 million from the current property portfolio.

Speaker #2: Just a few years ago. And lastly, in terms of assurance, almost 90% of our customers are either public sector or they're regulated entities, as you can see on the right-hand side.

Speaker #2: Off the slide, we've removed much of the commercial volatility from our portfolio. Now, still on the topic of resilience, let's look at how much capital...

Speaker #2: We expect to generate, in the next three years from our underlying cash flow—in the period FY27 to FY29—we're targeting cumulative operating free cash flow.

Speaker #2: Of £600 to £700 million on the left. During that same three-year period, we expect to realize net capital of around £150 million.

Speaker #2: From the current property portfolio, offsetting property capital against cash tax, interest payments, and the remaining cash outflows in respect to fire and cladding, we are left with a total.

Tom Hinton: Offsetting property capital against cash tax, interest payments, and the remaining cash outflows in respect to fire and cladding, we are left with a total allocatable capital of GBP 600 to 700 million, which is the middle block. From that total allocatable capital, we will continue to prioritize our core CapEx and our growing ordinary dividend. The residual, the 450 to 550, will be allocated in line with the group's capital allocation framework, which I'll look at now. Beyond the primary allocation for CapEx and dividend, the group will have the 500 million, around 500 million, of capital to deploy in line with the hierarchy of usage in points 3 to 5 on this slide. Firstly, we want to strengthen the balance sheet.

Speaker #2: Allocatable capital of £600 to £700 million, which is a middle total allocatable capital. We will continue to prioritize our core capex and our growing ordinary dividend.

Speaker #2: So, the residual—the £450 to £550 million—will be allocated in line with the Group's capital allocation framework, which I'll look at now. So, beyond the primary allocation for capex and dividend...

Speaker #2: The group will have £500 million—around £500 million—of capital to deploy in line with the hierarchy of uses in points 3 to 5.

Speaker #2: On this slide, so firstly, we want to strengthen the balance sheet. We are pleased with the substantial progress that's been made in recent years.

Tom Hinton: We are pleased with the substantial progress that we made in recent years in this respect. We have achieved the average net cash target of average net cash of GBP 11 million in FY26, which, of course, was an important milestone. Over the medium term, we will focus on growing this further, reaching a target of more than GBP 200 million of net cash by FY29, which will provide the group with additional resilience, capital optionality, and continued balance sheet efficiency. We also have scope to consider selective value-accretive acquisitions in the core markets as compelling opportunities arise, and that is point number four. Subject to the above considerations, and recognizing the role that share buybacks play in enhancing shareholder distributions, we will return excess capital via share buyback programs. That covers our second priority of resilience, how we will strengthen our balance sheet and enhance capital allocation options.

Speaker #2: In this respect, we've achieved the average net cash target—average net cash of £11 million—in FY26, which, of course, was an important milestone.

Speaker #2: But over the medium term, we will focus on growing this further, reaching a target of more than £200 million of net cash by FY29.

Speaker #2: This will provide the group with additional resilience, capital optionality, and continued balance sheet efficiency. We also have scope to consider selective, value-accretive acquisitions.

Speaker #2: In the core markets, as compelling opportunities arise — and that's point number four — then, subject to the above considerations and recognizing the role that share buybacks play...

Speaker #2: In enhancing shareholder distributions, we will return excess capital via share buyback programs. So, that covers our second priority of resilience—how we'll strengthen our balance sheet.

Speaker #2: And enhance capital allocation options. So let's now turn to the third pillar, which is performance. Starting with the key metric of EPS, and more broadly.

Tom Hinton: Let us now turn to the third pillar, which is performance, and starting with the key metric of EPS, more broadly, total shareholder returns. Driving EPS performance hinges on our two other strategic pillars of growth and resilience. Through growth, we are targeting a significant increase in AOP as we grow revenue through the considerable market opportunities that Stuart detailed, while simultaneously maintaining and augmenting our margin in the 4% to 4.5% range. Secondly, through resilience and a stronger balance sheet, we will have the ability to repay our GBP 250 million bond. We therefore expect to see structurally lower net interest expense as the group's capital structure benefits from becoming debt-free. In FY26, the group recorded net interest expense of GBP 35 million. We expect to see that rapidly fall in the medium term with significantly lower costs after we repay the 9% coupon bond.

Speaker #2: Total shareholder returns. Driving EPS. Performance hinges on our two other strategic pillars: growth and resilience. Through growth, we are targeting a significant increase in AOP.

Speaker #2: As we grow revenue through the considerable market opportunities that Stuart detailed, while simultaneously maintaining and augmenting our margin in the 4% to 4.5% range.

Speaker #2: And then secondly, through resilience and a stronger balance sheet, we will have the ability to repay our £250 million bond. We therefore expect to see structurally lower...

Speaker #2: Net interest expense: as the Group’s capital structure benefits from becoming debt free in FY26, the Group recorded net interest expense of £35 million.

Speaker #2: We expect to see that rapidly fall in the medium term, with significantly lower costs after we repay the 9% coupon bond. So, these two drivers—

Tom Hinton: These two drivers, AOP growth and lower interest costs, give us the confidence to target EPS growth rate of greater than 10% CAGR over the medium term. This is before the added benefit via a lower share count from any future share buyback programs. As mentioned earlier, we will continue to prioritize the ordinary dividend. We see the combination of this sustainable dividend and strong double-digit EPS growth as providing a balanced and attractive combined total shareholder return. Looking more broadly at performance, today we are updating our medium-term targets across a full range of metrics, reflecting the opportunity that we see for our business.

Speaker #2: AOP growth and lower interest costs give us the confidence to target an EPS growth rate of greater than 10% CAGR over the medium term. And this is before the added benefit.

Speaker #2: Via a lower share count from any future share buyback programs. So, as mentioned earlier, we will continue to prioritize the order of dividend. We see the combination.

Speaker #2: Of this sustainable dividend and strong double-digit EPS growth as providing a balanced and attractive combined total shareholder return. So, looking more broadly at performance.

Speaker #2: Today, we are updating our medium-term targets across a full range of metrics, reflecting the opportunity that we see for our business. So, starting with revenue.

Tom Hinton: Starting with revenue, we intend to grow the top line by mid-single digits each year, blending through the significant opportunities in the growth sectors such as water, defense, energy, and healthcare that Stuart talked about earlier with our established businesses in our core markets. Next down, we retain our 4% to 4.5% margin target for adjusted operating profit, and that is enabled, as Stuart discussed, by our differentiated end-to-end capability. Retaining the 4% to 4.5% margin target, despite our strategic decision on property, reflects our confidence in the core infrastructure and construction businesses and Kier's differentiated offering. These top-line and bottom-line targets are key drivers of EPS, which we aim to grow at double digits. As already mentioned, we are targeting an average net cash position of GBP 200 million by FY29 while continuing to deliver our cash conversion of over 90%.

Speaker #2: We intend to grow the top line by mid-single digits each year, blending through the significant opportunities in the growth sectors, such as water.

Speaker #2: Defence, energy, and healthcare, that Stuart talked about earlier, with our established businesses in our core markets. Next down, we retain our 4% to 4.5% margin.

Speaker #2: Target. For adjusted operating profit. And that's enabled. As Stuart discussed. By our differentiated. End to end capability. Now retaining the four to four and a half percent margin target.

Speaker #2: Despite our strategic decision on property, it reflects our confidence in the core infrastructure and construction businesses, and Kier's differentiated offering. So these top-line and bottom-line targets—

Speaker #2: They are key drivers of EPS, which we aim to grow at double digits. As already mentioned, we are targeting an average net cash position of £200 million.

Speaker #2: By FY29, while continuing to deliver our cash conversion of over 90%. And finally, consistent with previous guidance, the group aims to grow the ordinary dividend.

Tom Hinton: And finally, consistent with previous guidance, the group aims to grow the ordinary dividend in line with earnings and maintain the 3x cover. We see these medium-term targets as challenging, but we also see them as realistic. We also see delivering on these targets as a pathway to significant shareholder returns across the medium term, and I think truly delivering the performance component of the priorities for Kier. On that note, I will finally hand back to Stuart to wrap up.

Speaker #2: In line with earnings and maintaining the three times cover, we see these medium-term targets as challenging, but we also see them as realistic.

Speaker #2: We also see delivering on these targets as a pathway to significant shareholder returns across the medium term. And I think truly delivering the performance.

Speaker #2: ...component of the priorities for Kier. So, on that note, I'll finally hand back to Stuart to wrap up.

Speaker #1: Thank you. So, good news is I've only got another 20 slides to go through. Okay, thank you, Tom. Before we move to questions, I want to close today's presentation.

Stuart Togwell: Thank you. Good news is I have only got another 20 slides to go through. Okay. Thank you, Tom. Before we move to questions, I want to close today's presentation by bringing the investment case together, showing how the strengths we have discussed combine to create a compelling and differentiated proposition. Taken together, they leave Kier well-placed to generate substantial value for our stakeholders through a stronger, more focused business. And there it is. The opportunity ahead of us is significant. We are entering a once-in-a-generation investment cycle in UK infrastructure, reflected in the scale of the frameworks we have secured and supported by clear structural tailwinds across our key markets. Kier is exceptionally well-placed to capture that opportunity, given our leading positions in essential infrastructure and construction markets, our customer relationships, and our disciplined approach to risk. Our financial profile is strong and improving.

Speaker #1: By bringing the investment case together, showing how the strengths we have discussed combine to create a compelling and differentiated proposition. Taken together, they leave Kier well placed.

Speaker #1: To generate substantial value for our stakeholders through a stronger, more focused business. And there it is. So, the opportunity ahead of us is significant.

Speaker #1: We are entering a once-in-a-generation investment cycle in UK infrastructure, reflected in the scale of the frameworks we have secured and supported by clear structural.

Speaker #1: Tailwinds across our key markets. Kier is exceptionally well placed to capture that opportunity, given our leading positions in central infrastructure and construction markets, and our customer relationships.

Speaker #1: And our disciplined approach to risk. Our financial profile is strong and improving. We are growing well, delivering a top-tier industry margin, and continuing to generate.

Stuart Togwell: We are growing well, delivering a top-tier industry margin, and continuing to generate significant cash. That gives us the resilience and opportunity to invest in the business, strengthen the balance sheet, and create value for shareholders. We have a clear path to enhance returns over the medium term, underpinned by the strategic priorities we have set out today, namely growth, resilience, and performance. The medium-term targets Tom outlined, from mid-single digit revenue growth to double-digit EPS CAGR, demonstrates our confidence in Kier's ability to convert these opportunities into sustainable growth and improved shareholder returns. As I reflect on my first year as Kier's Chief Executive, I am more confident than ever in the future of this business. We have strong foundations, a focused strategy, disciplined execution, and leading positions in markets that are essential to the UK.

Speaker #1: Significant cash—that gives us the resilience and opportunity to invest in the business, strengthen the balance sheet, and create value for shareholders. We have a clear path.

Speaker #1: To enhance returns over the medium term, underpinned by the strategic priorities we have set out today—namely, growth, resilience, and performance—and the medium-term targets.

Speaker #1: Tom outlined: from mid-single-digit revenue growth to double-digit EPS CAGR demonstrates our confidence in Kier's ability to convert these opportunities into sustainable growth.

Speaker #1: ...and improved shareholder returns. So, as I reflect on my first year as Kier's Chief Executive, I am more confident than ever in the future of this business.

Speaker #1: We have strong foundations, a focused strategy, disciplined execution, and leading positions in markets that are essential to the UK. Together, these give us a firm platform to grow.

Stuart Togwell: Together, these give us a firm platform to grow, increase returns, and create lasting value for all of our stakeholders. Thank you very much for listening today, both here in the room and online. And we are now pleased to take your questions. Thank you. Come round. You cannot move. Oh, sorry. That would have been good.

Speaker #1: Increased returns, and create lasting value for all of our stakeholders. So, thank you very much for listening today, both here in the room and online.

Speaker #1: And we will now be pleased to take your questions. Thank you. Yes, come around. Oh, you can't move? Oh, sorry. That would be good.

Speaker #2: Johnny Kuber from Deutsche Unimess. Thanks for the presentation; a lot to get excited about in there. Could I ask firstly, on how you'll decide on—

Jonny Sherrit: Jonny Sherrit from Deutsche Numis. Thanks for the presentation. A lot to get excited about in there. Could I ask firstly on how you will decide on the timing of things like buybacks? Because on slide 30, I think the quantum where you set it out very clearly and the implication is there could be about GBP 100 million a year surplus for buybacks. But when you are looking at that decision each year, how will you decide on it based on timing of capital coming out of property, and when you might repay the bond?

Jonny Coubrough: Jonny Sherrit from Deutsche Numis. Thanks for the presentation. A lot to get excited about in there. Could I ask firstly on how you will decide on the timing of things like buybacks? Because on slide 30, I think the quantum where you set it out very clearly and the implication is there could be about GBP 100 million a year surplus for buybacks. But when you are looking at that decision each year, how will you decide on it based on timing of capital coming out of property, and when you might repay the bond?

Speaker #2: The timing of things, like buybacks, because on slide 30, I think the quantum—where you've set it out very clearly—and the implication is…

Speaker #2: There could be about £100 million a year—surplus—for buybacks. But when you're looking at that decision each year, how do you decide on it?

Speaker #2: Based on the timing of capital coming out of property, and when you might repay the bond.

Speaker #1: Yeah, I think you explained it very nicely there. So, look, firstly, we're a very cash-generative business, and that comes across very nicely. Is it slide 30?

Tom Hinton: Yeah. I think you explained it very nicely there. Look, firstly, we are a very cash generative business, and that comes across very nicely in slide 30, where you can see the amount of cash that we are about to generate over the next three years. As I tried to outline in the capital allocation framework, our priority is we want to and we need to strengthen the balance sheet. So that is going to kind of help determine the pace at which we can do future either acquisitions or buybacks. So that is the kind of the determining factor, which is how fast the cash comes in through the core business and the pace at which we execute the kind of the sell down our portfolio.

Speaker #1: Here you can see the amount of cash that we're about to generate over the next three years. And, as I tried to outline in the allocation,

Speaker #1: Our capital allocation framework — our priority is we need, we want to, and we need to strengthen the balance sheet. So that's going to, kind of...

Speaker #1: Help determine the pace at which we can do future either acquisitions or buybacks. So that's kind of the determining factor, which is.

Speaker #1: How fast the cash comes in through the core business, and the pace at which we execute the kind of the sell-down out of the portfolio.

Speaker #1: That's going to tell us how much cash we've got, and that's going to give us good guidance on the pace at which we can do future buybacks.

Tom Hinton: That is going to tell us how much cash we have got, and that is going to give us a good guidance on the pace at which we can do future buybacks.

Tom Hinton: That is going to tell us how much cash we have got, and that is going to give us a good guidance on the pace at which we can do future buybacks. Thanks very much, John.

Speaker #2: Thanks very much, Tom. And just to follow up, I mean, in theory, it could be quite back-end loaded then, in terms of the surplus capital generation.

Jonny Sherrit: Thanks very much, John. Just to follow up, in theory, it could be quite back end loaded then in terms of the surplus capital generation. Would you then look for a return program to be a sustainable one as opposed to a big one-off lump sum?

Jonny Coubrough: Just to follow up, in theory, it could be quite back end loaded then in terms of the surplus capital generation. Would you then look for a return program to be a sustainable one as opposed to a big one-off lump sum?

Speaker #2: Would you then look for a return program to be a sustainable one, as opposed to a big, one-off lump sum?

Speaker #1: We—we do a big lump sum buyback, at no point have we had that kind of conversation.

Tom Hinton: We haven't sat down and

Jonny Sherrit: Sure

Jonny Coubrough: Sure

Tom Hinton: said let's do a big lump sum buyback. At no point have we had that kind of conversation.

Speaker #2: Thanks very much. And then just, last question would be on the timing of the bond.

Jonny Sherrit: Thanks very much. Then just last question would be on the timing of the bond repayment and could that happen early? If so, what would the benefit be to your P&L?

Jonny Coubrough: Thanks very much. Then just last question would be on the timing of the bond repayment and could that happen early? If so, what would the benefit be to your P&L?

Speaker #1: Yeah.

Speaker #2: Repayment. And could that happen early? And if so, what would the benefit be to your—

Speaker #1: Back to the cash points. So, we wouldn't—we wouldn't look to make that repayment early. You know, you could repay from March 29th.

Tom Hinton: Back to the cash points. So we wouldn't look to make that repayment early. You could repay from March 2028, which would be a logical time to do it. That's nicely in line with the capital being released from the property business.

Speaker #1: 28th, which would be a logical time to do it, and that's nicely in line with the capital being released from the property business.

Speaker #2: Thanks very much. Good morning, Andrew Nassi from Peel Hunt. A couple of questions as well, please. I guess, first of all, Infrastructure had a very strong second half performance.

Jonny Sherrit: Thanks very much.

Jonny Coubrough: Thanks very much.

Andrew Nussey: Good morning, Andrew Nussey from Peel Hunt. A couple of questions as well, please. I guess first of all, infrastructure had a very strong H2 performance, both from a revenue and, in particular, margin performance. Water, you said, has been an influence to that strength. Should we read into that then that water as a sector, given that it is bringing in more Kier skills, is a higher margin opportunity than perhaps some traditional infrastructure sectors? That is the first question.

Speaker #2: Both from a revenue and, in particular, margin performance perspective. Water, you said, has been an influence to that strength. Should we read into that, then?

Speaker #2: That water as a sector, given it's bringing in more Kier skills, is a higher margin opportunity than perhaps some traditional infrastructure sectors. So the first question—

Speaker #1: No, you can't make that assumption from it. So, I mean, water is a strong margin business. It's a stronger—it's a higher margin than, for example, in the construction business.

Tom Hinton: No, you cannot make that assumption from it. Water is a strong margin business. It is a higher margin than, for example, the construction business, but it is in the middle of the pack in terms of infrastructure margin.

Speaker #1: But it's in the middle of the pack, in terms of infrastructure margins.

Speaker #2: And secondly, in relation to water, just your ability to keep resourcing the opportunity there successfully, given it's quite a supply chain–supply chain constrained.

Andrew Nussey: Secondly, in relation to water, just your ability to keep resourcing the opportunity there successfully, given it is quite a supply chain constrained sector.

Speaker #2: Sector.

Speaker #1: So, we always make sure that we don't take any work on unless we've got the resources to deliver it. We do have the benefit of that regional model.

Stuart Togwell: We always make sure that we do not take any work on unless we have got the resources to deliver it. We do have the benefit of that regional model, so we have got long established relationships with key supply chain in those areas. If there are major capital works, again, we have the ability to move resources from the mega projects to where they are needed most.

Speaker #1: So, we've got long-established relationships with key supply chain partners in those areas. And if there are major capital works, again, we have the ability to move resources from the mega projects.

Speaker #1: To where they're needed most.

Speaker #2: And, last question: I mean, in terms of the growth ambition stretched out to FY29, if you had to add Hitchen Brick into the order book—

Andrew Nussey: Last question. A number of the growth ambitions stretch out to FY29. If you had to add Hitchingbrook into the order book, what level of visibility would you hazard for FY29 in terms of revenue coverage? So greater than 95 for-

Speaker #2: What level of visibility would you hazard for FY29 revenue coverage? So, greater than 95% for—

Speaker #1: Well, we said for FY28 we're at 70%. And that kind of trajectory comes down. So if you look at '29, we'd be about...

Tom Hinton: Well, we said for FY28, we are at 70%.

Andrew Nussey: Yeah.

Tom Hinton: That trajectory kind of comes down. If you looked at '29, we would be about early 50s.

Speaker #1: Early 50s.

Speaker #2: Okay.

Andrew Nussey: Okay.

Speaker #1: Approximately. I'd go back to the—if you look at the general order book, it's £11.9 billion. If you look at the PCSA and ECI, that’s a total of £2 billion.

Tom Hinton: Approximately.

Andrew Nussey: That is great. Thank you.

Stuart Togwell: I would go back to the, if you look at the general order book is GBP 11.9 billion. If you look at the PCSA and ECI total of GBP 2 billion, you are looking at about three years worth of work for there for us to convert and deliver. Past that, I think we have got about GBP 65 billion of pipeline opportunity. So they are tender opportunities. So they are either call off from existing frameworks, new frameworks or renewals or contracts that we can see. They generally take a time to win and convert, but they are looking sort of two years hence further from that.

Speaker #1: You're looking at about three years' worth of work there for us to convert and deliver. And then past that, I think we've got about £65 billion of pipeline opportunity.

Speaker #1: So, they're tender opportunities. So, they're either call-offs from existing frameworks, new frameworks, or renewals. Or contracts that we can see. They generally take time to win and convert.

Speaker #1: But they're looking to sort of two years ahead, further from that.

Speaker #2: Thanks.

Andrew Nussey: Thanks.

Speaker #1: 5 years work.

Stuart Togwell: Five years work.

Speaker #2: Thanks. Ainsley Lammon from Investec. I think I've just got two, please. First of all, just going back to the net cash—the average, £200 million.

Aynsley Lammin: Thanks. Aynsley Lammin from Investec. I think I have just got two, please. First of all, just going back to the net cash, the average of GBP 200 million. Just interested how you arrived at that GBP 200 million number. Obviously, lots of work already in the pipeline, margins discipline. Do you need that much? Why was it not GBP 300 or GBP 100 interest there? Related to that, if we were to think about average daily net cash, would there be a big difference between the month-end number, say compared to GBP 11 million you just delivered? That is the first question. Then second question, just interested to hear your views on the overall health of the supply chain at the moment, what you are seeing in build cost inflation, just some general pointers there.

Speaker #2: Just interested—how did you arrive at that £200 million number? Obviously, there’s lots of work already in the pipeline, and there’s margin discipline. Do you need that much?

Speaker #2: Why wasn't it 300 or 100? Interest there. And related to that, if we were to think about average daily net cash, would there be a big difference between the month-end number?

Speaker #2: So, compared to £11 million you just delivered, that's the first question. And then, second question, just interested: your views on the overall health of the supply chain at the moment?

Speaker #2: What you're seeing in build cost inflation—just some general kind of points there.

Speaker #1: Let's do the first one. I'll do the second one.

Tom Hinton: You do the first one, I'll do the second one.

Speaker #2: Yeah.

Stuart Togwell: Yeah.

Speaker #1: So, the $200 million target—the first thing I'd say is it's definitely more of an art than a science. So, if I could say it was...

Tom Hinton: The GBP 200 million target, first thing I'd say is definitely more of an art than a science. If I could say it was exactly 200 or exactly 250, it's certainly a range. Where do we arrive at that range? Two ways of thinking about it. One is you need to be somewhere near your peer group. If you look at my peer group, they have much more cash on the balance sheet. I don't want to go as far as some of them. They've got a lot of cash, and you look at the commentary on them, it can be more nice to have some of that given back to shareholders. There is a point where we are an outlier in the group, and we do get a lot of noise around that.

Speaker #1: Exactly 200 or exactly 250. It's certainly a range. And where do we arrive within that range? There are kind of two ways of thinking about it.

Speaker #1: One is, you need to be somewhere near your peer group. So, if you look at my peer group, they all have much—they have much more cash on the balance sheet.

Speaker #1: Now, I think I don't want to go as far as some of them. They've got a lot—they've got a lot of cash. And—.

Speaker #1: You look at the commentary on them—it can be more. Nice to have some of that given back to shareholders. But there is a point where we are an outlier.

Speaker #1: In the group, we do get a lot. We do get a lot of noise around that. Now, we don't get it from our customers.

Tom Hinton: We don't get it from our customers, but we do get it from the investor community looking at us compared to our competitors. The other way of thinking about it is, what's the size of your negative working capital, negative net working capital? Because we run large construction projects and we run our cash very well, our negative working capital is about GBP 500 million to GBP 600 million. That's money that we have of our customers that obviously doesn't sit on the balance sheet. How do you support against that? We've got a great order book that we talked about. We've got GBP 12 billion of order book. If you think about a GBP 12 billion of order book delivering a 4% margin, you've got about GBP 500 million worth of cash coming from your order book. We can feel comfortable about that.

Speaker #1: But we do get it from the investor community. Look at us compared to our competitors. And then the other way I think about it.

Speaker #1: What is the size of your negative working capital—negative net working capital? And, because we run large construction projects, we manage our cash very, very well.

Speaker #1: Our net working capital, negative net working capital, is about $500 to $600 million. So that's money that we have of our customers, that obviously doesn't sit on the balance sheet.

Speaker #1: So how do you—how do you support against that? Well, we've got a great order book we talked about. We've got £12 billion of order book.

Speaker #1: And if you think about £12 billion of order book, delivering at a 4% margin, you've got about £500 million worth of cash coming from your order book.

Speaker #1: We can feel comfortable about that, but we want to have more against that negative working capital, because it's our—it's effectively our customers' money.

Tom Hinton: But we want to have more against that negative working capital because it affects our customers' money. That's why we come to the conclusion of we'd like a bit more cash, and 200 kind of gives you support against that negative working capital. So negative working capital has against it the order book and that incremental cash, which helps us get to the GBP 200 million level, which is then about, what, 4% of revenue? So when you kind of triangulate those measures, you come to the art of about 200, and that's how we come to that number.

Speaker #1: And that's why we've kind of come to the conclusion that we'd like a bit more cash. And £200 million is what gives you support against that.

Speaker #1: That negative working capital—so, negative working capital has against it the order book, and that incremental cash, which helps us get to the $200 million level.

Speaker #1: Which is then about, what, 4% of revenue. So that when you kind of triangulate those measures, you come to the order of about 200.

Speaker #1: And that's how we come to that number.

Speaker #2: And the average daily versus average.

Tom Hinton: And the average daily versus average

Aynsley Lammin: And the average daily versus average

Tom Hinton: Yes. That is the working capital swing that you get in the month. That makes, I am looking at my treasurer over there, GBP 120 to 150 million difference per annum.

Speaker #1: Yes. So, I mean—and that's the working capital swing that you get in the month. And that makes—I'm looking at my treasurer over there.

Speaker #1: £120 to £150 million difference per annum.

Speaker #2: And then. Supply chain. So.

Stuart Togwell: Then supply chain. We are definitely not immune to what is going on in the market and the macroeconomics. What we have is we mitigate it, and we mitigate that in a number of ways. Firstly, in terms of the sectors that we are in. We purposely stayed away from pure house building and high-end residential markets, which have been subjected to, certainly in terms of high increases in terms of inflation and difficulty in the supply chain. Our management of risk, Tom spoke about earlier in terms of either cost reimbursable contracts, which is about 60%, and a further 35% through the two-stage. We have a long period working with customers there in terms of working through design and agreeing who takes the risk on inflation. That is 95% of our revenue. I think thirdly, I will go back to our regional model.

Speaker #1: We're definitely not immune to what's going on in the market and the macroeconomics. But what we have is, we mitigate it. And we mitigate that in a number of ways.

Speaker #1: Firstly, in terms of the sectors that we are in, we have purposely stayed away from pure house building and high-end residential markets, which have been subjected to...

Speaker #1: Certainly, in terms of high increases in inflation and difficulty in the supply chain, our management of risk—so, as Tom spoke about earlier in terms of either cost reimbursable contracts—this is important.

Speaker #1: Which is about 60%, and a further 35% through the two-stage. So, we have a long period working with customers there, in terms of working through design.

Speaker #1: And agreeing, who takes the risk on inflation—so that's 95% of our revenue. I think, thirdly, I'll go back to our regional model. It means that...

Stuart Togwell: Means that we are locally placed and have long-term relationships with the supply chain. They prefer to work with us. They know us well, our people know their people, and they trust in our ability to pay. We get their trust and their reliability through that. That is the way that we manage it. But we are not immune. Okay, 7 minutes left. Cool.

Speaker #1: We are locally placed and have long-term relationships with the supply chain. So, they prefer to work with us. They know us well; our people know their people.

Speaker #1: And they trust in our ability to pay, so we get their trust and their reliability through that. So that's the way that we manage it.

Speaker #1: But we're not immune. Okay, 7 minutes left.

Speaker #2: Adrian Giese. Pamela Libram. The MAJ was a sort of good example of adopting collaboration.

Adrian Kearsey: Adrian Kearsey, Panmure Gordon. The MoJ was a good example of adopting collaboration.

Speaker #1: Yep.

Stuart Togwell: Yep.

Speaker #2: And in the presentation, there were a few comments where you—it seemed to indicate that that collaboration was rubbing off in other parts of your...

Adrian Kearsey: In the presentation, there were a few comments where it seemed to indicate that that collaboration was rubbing off in other parts of your other clients. Can you perhaps give some examples of how that has evolved?

Speaker #2: Sort of, other clients—can you perhaps, sort of, give some examples of how that's evolved?

Speaker #1: Yes, so there are two particular clients that have researched that alliance model and gone on to adopt it because they see the benefits of collaboration.

Stuart Togwell: Yes. So, there are two particular clients that have researched that alliance model and gone on to adopt it because they see the benefits of collaboration. The MoD frameworks and the new hospital program. So the new hospital program is an alliance. They decided to go through a direct award allocation of projects rather than tendering call-off projects, which gave us the ability to position ourselves around the Hinchingbrooke Hospital, which I mentioned before, that we have had a long-standing relationship with that client providing the FM facilities there. So we know the client well. They got to know us. So when it came to the allocation, we were allocated one of the first hospitals that came off the alliance. I am looking at the MD behind you to make sure I said that right. Any more questions?

Speaker #1: The MAD frameworks, and the New Hospital Programme. So, the New Hospital Programme is an alliance. They decided to go through a direct award allocation of projects.

Speaker #1: Rather than tendering call-off projects, which gave us the ability to position ourselves around the Hitchinbrook Hospital—which I mentioned before—we’ve had a long standing.

Speaker #1: We have a relationship with that client, providing the FM facilities there. So we know the client well; they got to know us. So when it came to the allocation—

Speaker #1: We were allocated one of the first hospitals that came off the—came off the alliance. I'm looking at the MD behind you to make sure I said that right.

Speaker #1: Any more questions.

Speaker #2: Hi, Stephen Rawlinson from Applied Value. In terms of the margin accretion, or the margin improvement, to what extent is that arising from a mix in the type of work you're doing?

Stephen Rawlinson: Hi, Stephen Rawlinson from Applied Value. In terms of the margin accretion or the margin improvement, to what extent is that arising from a mix in the type of work you are doing? Because you are going to have, like you said, 800 people in design. I do not know how you cost those into projects, which is one question. The second question is, are you expecting to increase that element of design in there such that actually we would expect margin accretion from that, possibly above 4.5%? But could you just talk us through that a little bit?

Speaker #2: Because you've gone outside 800 people in design. I mean, I don't know how you cost those into projects, which is one question. The second question is...

Speaker #2: Are you expecting to increase that element of design in there, such that we would actually expect margin accretion from that—possibly above 4.5%? Could you just talk us through that a little bit?

Speaker #1: If you can imagine that—I had a conversation with Tom and I had to get together to get to 4.5%, and then we're already pushing above it.

Stuart Togwell: If you can imagine the number of conversations Tom and I had to get together to get to 4.5, then we are already pushing above it. There is definitely an impact of mix, and I would point to the growth in infrastructure compared to construction, and infrastructure generally has a higher margin, so we will get some benefit through that. You have got the runoff of property. We still will have good returns from those projects. But the way I look at it, rather than say one individual component of the mix, I would say in terms of it is the end-to-end capability that we have at scale that has got to drive productivity improvements as we grow. Certainly in terms of our move around digitalization, we are seeing that we are quicker to make good decisions within the business, and that has got to drive some productivity going forward.

Speaker #1: Look, there is definitely an impact of mix, and I would point to the growth in infrastructure compared to construction. Infrastructure generally has a higher margin.

Speaker #1: So, we will get some benefit through that. You've got the runoff of property. We still will have good returns from those projects. But the way I look at it, rather than say one individual component of the mix—

Speaker #1: I would say, in terms of, it's the end-to-end capability that we have at scale. That has got to drive productivity improvements as we grow.

Speaker #1: Certainly, in terms of our move around digitalization, we're seeing that we are quicker to make good decisions within the business. And that's got to drive some productivity going forward.

Speaker #1: So Tom and I are baking in some of those benefits in future years that we can see. That should be there. But mix and scale, I'd say, are the two.

Stuart Togwell: Tom and I are baking in some of those benefits in future years that we can see that should be there. But mix and scale, I would say are the two. In terms of design, I would point to the fact that do not just think it is restricted to only the 800 people in terms of what they do. What we have is a capability to manage all the design. Because we have that continuity of sectors, we do school after school, hospital after hospital, road after road. That inbuilt knowledge means that alongside our own designers, we know how to manage other design to make sure that we get the benefits out of it. Okay. We need to go online as well for questions. Is this the time we just need to go back and see if there is anyone online that wants to ask any questions?

Speaker #1: In terms of design, I would point to the fact that you shouldn't just think it's restricted to only the 800 people in terms of what they do.

Speaker #1: What we have is a capability to manage all the design. So, because we have that continuity of sectors, we do school after school, hospital after hospital.

Speaker #1: Road after road. That inbuilt knowledge means that, alongside our own designers, we know how to manage other design to make sure that we get the benefits out of it.

Speaker #1: Okay.

Speaker #2: We need to go online as well for questions.

Speaker #1: This is the time we just need to go back and see if there's anyone online that wants to ask any questions.

Speaker #3: At the moment, we currently have no questions on the telephone lines.

Operator: At the moment, we currently have no questions on the telephone lines.

Speaker #1: There we are. Good. Any final questions in the room?

Stuart Togwell: There we are. Good. Any final questions in the room?

Dan Cowan: Good morning. Dan Cowan from BNP Paribas. One question, please. Could you talk a little bit about what factors might drive cash flow conversion, please? You have just done 120%, and your target is above 90%. So what drives that range, please?

Speaker #2: Good morning. Dan Cowen from BNP Paribas. One question, please. Could you talk a little bit about what factors might drive cash flow conversion, please?

Speaker #2: You've just done 120%, and your target is above 90%. So, what drives that range, please?

Speaker #1: That was a very strong working capital, covered by large construction projects. So when you have large construction projects, that can give you quite good results.

Tom Hinton: That was a very strong working capital in a couple of our large construction projects. When you have large construction projects, that can give you quite good incremental working capital at the beginning, and that is where we can push it up quite high. So actually, we have got good working capital coming in from those large construction projects. The reality is that when you are 121 one year, you have got to expect it to come down a bit year after that. So we want to keep it up at the 100% level. We set that target of over 90%, but we are also conscious that there might be a bit of an outflow. We have got to manage on that when you have large working capital inflow. As we continue to grow, we are a negative working capital business.

Speaker #1: Incremental working capital at the beginning, and that's why we can push it up quite high. So actually, we've got good working capital coming in from those large construction projects.

Speaker #1: The reality is that when you're at 121% one year, you've got to expect it to come down a bit the kind of year after that.

Speaker #1: So, we want to kind of keep it up at the 100% level. We said that target of over 90%, but we're also conscious that there might be a bit of an outflow.

Speaker #1: We've got to manage on that. When you had large working capital inflow, as we continue to grow. We are a negative working capital business.

Speaker #1: So as you grow, that can keep that working capital coming in, and that kind of pushes it up.

Tom Hinton: As you grow, that can keep that working capital coming in, and that pushes it up.

Speaker #2: Okay. Okay.

Stuart Togwell: Okay. Again, I would like to thank everyone that has joined us today. Everyone on the line, thank you very much.

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