Keller revenue exceeds records as profit rises comfortably

Geotechnical contractor Keller Group posted its results for the year to 31 December on Monday, reporting record revenue of £1.78bn, up from £1.56bn, which the board said was mainly due to currency movements and strong growth in Europe, the Middle East and Africa.

The FTSE 250 firm said underlying profit before tax was down 11% due to an £18m loss in the Asia-Pacific division, largely as a result of continuing very difficult market conditions in Australia and Singapore.

It said significant restructuring was undertaken, and the APAC cost base was reduced by an annualised £12m.

The board reported a strong margin in North America alongside the “excellent growth” in EMEA, with an exceptional restructuring charge of £14.3m offset by exceptional credit due to Avonmouth insurance proceeds received and a valuation uplift.

Statutory operating profit was up 32% to £85.2m, while net debt increased to £306m from £183m, which Keller said was in large part due to currency differences and the £62m purchase of the Avonmouth property.

The firm was continuing to make “good progress” against the Group's medium term strategic objectives, the board claimed, with the year-end order book at all-time high, 20% above last year, including some “major” contract wins in the second half of 2016.

Total dividends per share were 28.5p for the year, up from 27.1p, an increase of 5%.

“Keller has had a mixed year, with disappointing financial results in our most challenging markets, notably Asia and Australia, overshadowing continued good progress in the US and Europe,” said chief executive Alain Michaelis.

“However we have continued to strengthen our industry position in terms of geographic reach, product range, and project scale.”

Michaelis said the group continued to implement its strategic initiatives, which the board was confident will realise gross benefits of £50m by 2020, around half of which was expected to be reflected as improved profitability.

“Despite the ongoing challenges in APAC, cost reduction measures already implemented and the Group record order book of more than £1bn gives us confidence for 2017.

“We also remain ideally placed to help respond to any increase in infrastructure spending in the US and beyond.”