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KIE Will Balance Higher Earnings Quality With Leadership Change And Dividend Prospects

Falling UK Spending And Rising Costs Will Hinder Pipeline Progress

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KIE
AnalystLowTarget
Not Invested
Published 03 Aug 2025

Update shared on 14 Dec 2025

Fair value Increased 10%
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AnalystLowTarget's Fair Value
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1Y
51.6%
7D
4.2%

Analysts have nudged their price target on Kier Group up from £2.00 to £2.20 per share, reflecting a modestly higher fair value despite reduced revenue growth assumptions and a higher discount rate. This is underpinned by expectations of stronger long term earnings quality and a higher future price to earnings multiple.

What's in the News

  • Chief Financial Officer Simon Kesterton will step down from the Board on December 31, 2025, with former Wincanton interim chief executive and ex-CFO Tom Hinton to assume the CFO and Board roles from January 1, 2026 (company announcement).
  • Kier completed a share buyback tranche between January 23 and June 30, 2025, repurchasing 4,552,151 shares, around 1.03% of its share capital, for £6.4 million (company announcement).
  • The Board proposed a final dividend of 5.2 pence per share, taking the total dividend to 7.2 pence per share with a cover of 3x, subject to shareholder approval for payment on December 3, 2025 (company announcement).
  • The company signalled continued appetite for value accretive acquisitions in its core markets, and management reiterated that it is actively considering suitable opportunities (management commentary).
  • Shareholders at the November 13, 2025 AGM approved the reappointment of PricewaterhouseCoopers LLP as the company auditor (AGM results).

Valuation Changes

  • Fair Value per Share has risen slightly, increasing from £2.00 to £2.20.
  • Discount Rate has risen moderately, moving from 12.34 percent to 13.19 percent, implying a higher perceived risk profile.
  • Revenue Growth Assumption has fallen meaningfully, reduced from approximately 4.40 percent to 2.90 percent per year.
  • Net Profit Margin has edged down marginally, from about 2.17 percent to 2.16 percent, indicating broadly stable profitability expectations.
  • Future P/E Multiple has increased significantly, up from around 11.8x to 15.4x, signalling higher expected valuation for future earnings.

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Disclaimer

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