Keller Group plc (“Keller” or “the group”), the world’s largest geotechnical contractor, issues the following trading update.
For the group as a whole, both revenue and profit in the four months since the half year are ahead of the same period last year. Tendering activity and contract awards remain healthy and the order book, of work to be undertaken in the next 12 months, is around 10% higher than at the same time last year.
The group remains on course to meet the Board's expectations for the full year, with good year-on-year growth in both revenue and operating profit.
There have been no major changes in our markets since we reported the group’s 2017 interim results on 31 July.
In North America, the US construction market as a whole remains solid but with continuing regional and sectoral variations. Hurricanes Harvey and Irma resulted in lost production on some sites in Florida and Texas for periods of up to two weeks in the third quarter. Whilst this had an estimated negative one-off profit impact of £3m, we expect the heightened focus on hurricane and flood defences to lead to increased investment over time. Operating profit in North America will decline in 2017 as a result of previously noted weakness in specific regional markets, as well as the one-off effect of the hurricanes. Looking ahead, bidding activity remains healthy and the order book is around 10% above the level at the same time last year. The group is expected to benefit from the proposed US corporate tax changes, if enacted, as well as in the medium term from any uplift in infrastructure spending in both the US and Canada.
In EMEA, we are still seeing strong revenue and profit growth, helped by continued excellent execution of the US$180m contract in the Caspian region, which remains on track to be substantially completed by the end of 2017. As a result, and as previously noted, profit for this division in 2018 will be materially below what should be an excellent 2017 result. Excluding this major project, EMEA's underlying performance is expected to continue to improve next year.
In APAC, pricing remains challenging in certain market segments. However, the division continues to make progress in reducing its losses as the results of restructuring and a higher workload materialise. Our business in India is growing strongly and in Australia we are seeing an upturn in investment from the resources industry. We continue to expect that APAC will return to profitability in 2018.
As outlined at our recent Capital Markets Day, we are confident that our technical leadership, wide product portfolio, broad branch network and operational strength will continue to drive our business forward. We are on track for 2017 and expect the group as a whole to make further progress in 2018.
Keller will announce its 2017 full year results on 26 February 2018.
Notes to Editors:
Keller is the world’s largest geotechnical contractor, providing technically advanced geotechnical solutions to the construction industry. With annual revenue of around £2.0bn, Keller has approximately 10,000 staff world-wide.
Keller has leading market positions in North America, Europe, Africa and Australia.
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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.
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).
Market Abuse Regulation Statement:
This announcement contains inside information as defined in EU Regulation No. 596/2014 and is in accordance with the Company’s obligations under Article 17 of the Regulation.
LEI number: 549300QO4MBL43UHSN10
Classification: 3.1 (Additional regulated information)