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Change in risk policy sees Kier snub big jobs

FINANCE Thirteenth consecutive year of profit growth Order book hits record level

TURNOVER at Kier's major projects operation is dwindling and this looks set to continue as the construction giant continues to shun large, risky jobs.

Major project turnover halved to £168.7 million in the year to June 2004 but for 2005 it has been rolled in with the burgeoning regional arm, which provided £954.6 million of the group's construction turnover of £1.1 billion.

Chief executive John Dodds said: 'We're changing the risk profile. A lot of the big stuff is finishing off and I don't know if it will be replaced.' Kier considered pricing jobs for the £1 billion East London Line but decided to keep well away and will only work on projects for the 2012 Olympic Games in London if the work is organised early.

Mr Dodds said: 'We decided not to be part of the East London Line. The risk profile, commitment and chances of success caused us to step out of it as we've got better things to do with our people.

'With the Olympics, it depends when it comes out. If it's done in time with a decent r isk prof ile, we will be interested.' The move is part of the group's attempt to avoid the risky jobs loathed by City grandees for frequently blowing big black holes in quoted contractors' accounts.

About a quarter of Kier's 2005 construction turnover came from schools jobs but the firm is equally wary of the Government's Building Schools for the Future programme due to bidding costs.

The firm is also suffering from a dearth of health sector work from the NHS ProCure 21 initiative despite having won work and assigned staff to projects.

Mr Dodds added: 'ProCure 21 is not coming forward with the amount of work they said there would be so there's an imbalance in the central team. BSF is worth pursuing but it's expensive.' The f irm did £37 million of overseas contracting work last year, working solo in Dubai and across the Caribbean but in joint ventures with Comedat and Mivan in Jordan and Romania respectively.

Much of Kier's work in the Caribbean is with Alcoa and the UK firm is looking to work in other overseas locations with the US aluminium producer.