Kier Group, the UK-based construction, services and property group released its preliminary full-year results last week.

The company enjoyed good performance over the last year with underlying revenues up 5% and profit for the year up 13%.

All of the divisions posted positive results, driven by property, which has benefited from a joint venture strategy aimed at providing capital-efficient sources of funding.

In addition, the company announced a record construction and services order book of £10.2bn, demonstrating a positive outlook for the company. Investors welcomed the news and the share price went up over 3% on the back of the results.

Despite Kier performing consistently well in recent years, the construction sector has been out of favour with investors and the share price has subsequently underperformed. One of the key concerns is the level of net debt: £186m at the year end.

Management of Kier have acknowledged this concern, and reassuringly launched the “Future Proofing Kier” (FPK) programme, which aims to improve operational focus and efficiency, improve cash generation and ultimately accelerate the reduction in debt.

Part of this will be achieved by disposing of some of the non-core assets within the company in order to simplify the business.

They expect to generate £20m-£40m of free cash flow per annum which will be initially used to reduce debt and then finance the ongoing FPK programme.

Kier Group has transformed well over the last few years but investors will be keen to see the benefits of the FPK programme.