Keller Group, the world’s largest geotechnical specialist contractor, issues a trading update for the first four months of the year ahead of its Annual General Meeting to be held at 9.30am today.
The Board’s expectations for the full year remain unchanged, despite a challenging environment, supported by our record and growing order book of £1.4bn, and a foreign exchange tailwind. The Group has had a mixed start to the year, whilst revenues are in line with our expectations and we have successfully passed on a significant portion of cost increases in the form of higher prices, overall Group performance has been affected by materials shortages and the residual effect of inflation. We expect our full year performance to have the customary second half weighting, and to reflect our usual increase in trading momentum as the year progresses.
In North America, whilst performance in our Foundations businesses has been impacted by materials shortages, the inflationary environment, and other operational challenges impacting project performance, all the other business units have performed well. Disrupted supply chains are causing some localised materials shortages, affecting spot pricing and more importantly materials availability. Suncoast is trading as expected with demand for single family homes remaining robust. RECON continues to integrate well into the division and the large energy facility project in the Gulf Coast is progressing favourably.
We continue to make strategic progress and have completed the bolt-on acquisition of GKM Consultants Inc, a small geo-structural measurements and monitoring business based in Quebec, Canada. GKM will integrate into our Speciality Services business in our North America Division and will help accelerate our growth in this specialist segment.
In Europe, the division is trading in line with our expectations despite several deferred project starts, the residual operational effects of COVID-19, supply shortages, and the increased macroeconomic uncertainty in the region. As part of our continuing strategic review of our asset portfolio, we have successfully exited two of our more peripheral geographies as we continue to refine the focus of the division.
AMEA, which was the most impacted by COVID-19 of all our businesses in 2021, has had a strong start to the year and is trading in line with expectations. Following the lifting of COVID-19 related government restrictions in most parts of Australia, trading activity has begun to recover with good momentum building. Austral is successfully executing on a number of projects in its pipeline and India is also performing well. Whilst the ASEAN business has felt the residual effects of COVID-19 with lower market demand, we expect trading activity to pick up in the second half. The business environment in the Middle East and Africa remains challenging, however, actions we have taken have significantly improved profitability in the period.
Safety is always our first priority. Last month we held our inaugural Global Safety Week to recognise our colleagues’ efforts in this critical area and the good progress that is being made. On our journey to net zero we have made good progress implementing plans in every business unit to reduce Scope 2 (indirect emissions).
Outlook
Whilst we have had a mixed start to the year and the environment continues to be challenging, full year expectations remain unchanged, supported by our record and growing order book of £1.4bn, and a foreign exchange tailwind. We expect net debt/EBITDA leverage ratio to remain within the 0.5x–1.5x target range (2021: 0.8x).
At today’s Annual General Meeting approval is being sought for the 2021 final dividend of 23.3p per share (2020: 23.3p per share) to be paid on 1 July 2022 to shareholders on the register as at the close of business on 6 June 2022, resulting in a maintained dividend for the full year of 35.9p per share. As we advance through 2022 the Board will review the progression of our dividend.
The Group’s interim results for the half year ending 26 June 2022 will be announced on 2 August 2022.
For further information, please contact:
Keller Group plc
Michael Speakman, Chief Executive Officer
David Burke, Chief Financial Officer
Caroline Crampton, Group Head of Investor Relations
www.keller.com
020 7616 7575
FTI Consulting
Nick Hasell
Matthew O’Keeffe
020 3727 1340
Notes to editors
Keller is the world's largest geotechnical specialist contractor providing a wide portfolio of advanced foundation and ground improvement techniques used across the entire construction sector. With around 10,000 staff and operations across five continents, Keller tackles an unrivalled 6,000 projects every year, generating annual revenue of more than £2bn.
Cautionary statements
This document contains certain 'forward-looking statements' with respect to Keller's financial condition, results of operations and business and certain of Keller's plans and objectives with respect to these items.
Forward-looking statements are sometimes, but not always, identified by their use of a date in the future or such words as 'anticipates', 'aims', 'due', 'could', 'may', 'should', 'expects', 'believes', 'intends', 'plans', 'potential', 'reasonably possible', 'targets', 'goal' or 'estimates'. By their very nature forward looking statements are inherently unpredictable, speculative and involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements. These factors include, but are not limited to, changes in the economies and markets in which the Group operates; changes in the regulatory and competition frameworks in which the Group operates; the impact of legal or other proceedings against or which affect the Group; and changes in interest and exchange rates. For a more detailed description of these risks, uncertainties and other factors, please see the Principal risks and uncertainties section of the Strategic report in the Annual Report and Accounts. All written or verbal forward looking-statements, made in this document or made subsequently, which are attributable to Keller or any other member of the Group or persons acting on their behalf are expressly qualified in their entirety by the factors referred to above. Keller does not intend to update these forward-looking statements. Nothing in this document should be regarded as a profits forecast. This document is not an offer to sell, exchange or transfer any securities of Keller Group plc or any of its subsidiaries and is not soliciting an offer to purchase, exchange or transfer such securities in any jurisdiction. Securities may not be offered, sold or transferred in the United States absent registration or an applicable exemption from the registration requirements of the US Securities Act of 1933 (as amended).