Keller Group in strong position despite revenue dip

Revenue at the FTSE 250 ground engineering specialist dipped 2% in both reported and constant currency terms during the calendar year, to £1.56bn, from £1.6bn.

EBITDA rose a reported 10%, however, to £155.5m. Operating profit and profit before tax were both up 12% to £103.4m, and £95.7m respectively.

The company's board reported earnings per share of 86.4p, up 15%. Cash generated from operations was £142.3m, a drop of 14%, however.

"The group has performed well in 2015. We have been pleased to record another year of profit growth despite sales being lower as a result of less revenue from large projects," said Keller chief executive Alain Michaelis.

The drop in revenue was largely attributed to the completion of Keller's largest-ever contract, the Chevron-operated Wheatstone LNG project in Australia, towards the end of 2014.

Keller's operating margin improved to 6.6% during the period, compared to 5.8% in 2014, and achieving the board's through-the-cycle target of 6.5%. Return on average capital employed also increased to 20.5%, from 18.3%.

Year-end net debt was £183m, up from £102.2m in 2014, reflecting £52.2m spent on acquisitions during the year and a £27.5m cash outflow relating to an exceptional contract provision recognised in 2014.

Net capital expenditure, at £69.6m, was up on the prior year's £61m and was £17.8m in excess of depreciation and amortisation. Keller's board said that resulted from its ongoing investment in higher growth markets.

Looking ahead, Michaelis said 2016 operations and results were expected to be in line with the board's expectations.

"Whilst conditions in our markets are varied, the ongoing strength in the US, our largest market, continuing improvements in underlying operating performance, and our strong order book mean that the Group is set for another year of progress in 2016," he said.

"At the end of January, the group order book of work to be undertaken over the next twelve months, including that of 2015 acquisitions, was 15% higher than at the same time last year, with increases in all divisions," Michaelis confirmed.