Kier (KIE) £17.69

Gain to date: 8.0%

Construction-to-service group Kier (KIE) is targeting double-digit CAGR (compound annual growth rate) in profits to 2020 via a combination of new opportunities overseas as well as in UK segments such as care homes and private rentals. It reckons construction margins will increase from 2% to at least 2.5% and service margins from 4.5% to at least 5%.

Also revealed in its Capital Markets Day for analysts and institutional investors (3 Jul) is a plan to double capital allocation to property and increase its return on capital employed target from 15% to 20%. This is clearly a business that refuses to stand still and once that is ‘speaking investors’ language’ according to Westhouse analyst Alastair Stewart.

He comments: ‘The presentation marked the first official event by new CEO, Haydn Mursell and we noted a change in tone, without a change in core values: for instance, dividend policy (“broadly tracking earnings”), total shareholder returns and capital allocation were, in our view, articulated more firmly than in the past.’