In a six-month trading update this morning chief executive Haydn Mursell revealed that the group’s average monthly net debt had jumped to £350m from £300m a year ago.

He put the rise down to the £24m cost and acquired debt of McNicholas Construction and investment in commercial and residential property, where assets were valued at around £500m.

Kier investment in property is now at target level with debt expected to peak in the six months ahead before reducing over the next two years.

“Our first half performance continues to demonstrate the strength and stability of the business and the benefits of our client focused strategy.

“The group remains on course to deliver double digit profit growth in the current year and to achieve its Vision 2020 targets,” said Mursell.

He added that the McNicholas acquisition was performing well with a clutch of fresh orders since Kier bought the 2000-staff firm seven months ago.

Mursell said operating margins had been maintained at the construction and services divisions with order books  strong at £9.5bn, and all of forecast revenue for the 2018 financial year secured.

Kier’s Highways business is currently in negotiation with Highways England for three-year extensions to its Area 3 and 9 contracts, with a final decision expected by the end of March 2018.

The trading update went down well in the City with Kier’s share price rising more than 12% in early trading.