Kier Group has announced its exit from housebuilding amid ongoing challenges in the UK property market, choosing instead to concentrate on sectors such as nuclear power, hospitals, and infrastructure projects. The FTSE 250 construction company confirmed it will halt investment in new residential developments while continuing work on existing projects, including the regeneration of a former industrial site near Watford Football Club and the redevelopment of Guildford railway station in Surrey in partnership with local authorities and Network Rail. Both projects are expected to deliver hundreds of new homes.
The decision reflects Kier’s strategic shift towards its core construction and infrastructure divisions, which the company describes as “powerhouse” areas underpinned by long-term growth trends. Kier is a major player in the British construction industry, with a portfolio spanning water system upgrades, school builds, and transport infrastructure, and has benefitted significantly from HS2 contracts.
In its most recent financial year, ending June 30, Kier reported a 6.8% increase in revenue to £4.35 billion and a 7.3% rise in pre-tax profits to £83.8 million. The company maintained its final dividend at 5.2 pence per share, payable December 4. Kier’s chief financial officer, Tom Hinton, noted that its property division—now the smallest segment—continued to face headwinds due to a subdued housing market shaped by broader macroeconomic instability.
The wider construction and development sectors have struggled with increasing costs and stagnating house prices, compounded by higher mortgage rates that have dampened demand. Reflecting on the company’s new direction, Chief Executive Stuart Togwell emphasized the need to focus resources on areas with the highest potential for value creation. He highlighted significant upcoming investment cycles in UK infrastructure and expressed confidence in Kier’s ability to capitalize on these opportunities.
Togwell also set ambitious goals for growth, aiming to more than double revenue from water, energy, and defence contracts by 2029. Early indicators of this strategy’s success are evident, with Kier expecting annual earnings to reach the upper range of forecasts, supported by recent contract wins and a robust order book that reached nearly £11.9 billion—an increase of almost £1 billion over the past year.
Financial analysts have responded positively to Kier’s medium-term outlook, noting plans for mid-single-digit revenue growth alongside an operating profit margin target between 4% and 4.5%. RBC analyst Ben Pfannes-Varrow described the updated guidance as a clear upgrade to previous expectations.
Following the announcement, Kier’s shares rose by 3.9%, closing at 257.5 pence and valuing the company at approximately £1.1 billion.