TIDMKLR
RNS Number : 1803Z
Keller Group PLC
16 May 2019
For immediate release 16 May 2019
Keller Group plc
Trading update
Keller Group plc ("Keller" or "the group"), the world's largest
geotechnical specialist contractor, issues a trading update ahead
of its Annual General Meeting to be held at 11.00am today.
The Board's expectations for the full year remain unchanged,
supported by generally stable market conditions. The group has
experienced modest trading for the year to date and continues to
expect profits to have a second half bias. Our order book remains
around GBP1 billion, slightly lower than at the same point last
year reflecting the previously announced restructuring in APAC. The
order book grew in each of North America and EMEA.
In North America, the adverse steel cost impact in Suncoast
experienced in 2018 is now reversing as anticipated and margins
have returned to more normal levels. Moretrench, acquired in 2018,
is performing well and planned cost synergies have been exceeded.
Elsewhere, in North America performance in the first four months
has been weaker than anticipated, partly due to mix and partly due
to additional costs to recover from the adverse weather experienced
in January, but this shortfall is expected to be recovered in the
second half. There is no material update in respect of the scope
adjustment to the Bencor long term contract, which we continue to
negotiate with the client and we remain confident in the position
that has been taken.
In EMEA, our European businesses are collectively performing in
line with our expectations, with a particularly strong performance
from South East Europe. The Middle East is having a much quieter
year to date following the completion of major projects and the
slow development of new projects. Franki Africa has continued to
struggle and we are managing it closely, although it is bidding on
new projects in the region. Brazil remains challenging although
underlying performance is slightly improved compared to the prior
year.
In APAC, our expectation of a return to profitability in the
second half remains on track. The restructuring in ASEAN and the
subsequent refocusing of the business on ground improvement is
proceeding to plan; asset disposals will generate additional cash,
and profitability continues to improve. India is performing to
plan. Market conditions and performance across our Australian
businesses remain mixed, with a slower start to the year than
anticipated, but a recovery is expected for the year as a whole.
Austral has been affected in the period by the recent cyclone which
has impacted all mining and processing activities in the Pilbara,
but is expected to recover well. The previously announced
restructuring at Waterway has proceeded to plan, and additional
action will be taken in response to the further deterioration in
the market.
Overall trading performance in the first four months of 2019 has
been lower than anticipated but is on an improving trend. This,
together with the final completion of our Caspian project in the
first half of last year, means that our results for the first half
of 2019 will be materially lower compared to the first half of
2018. We continue to expect a much stronger second half, and for
full year revenue to be broadly flat on 2018, with an improvement
in margin driving a recovery in profit. Net debt has risen slightly
since year end, albeit less than expected, and debt leverage is
expected to increase as anticipated to over 2.0x at the half year.
However, the expected year-on-year profit improvement together with
a strong focus on organic cash generation, means that we expect
debt leverage to reduce significantly and to be within the group's
1.0x to 1.5x target range by the year end.
Overall Keller continues to expect to make good progress in
2019.
Keller will announce its interim results for the six months
ending 30 June 2019 on 29 July 2019.
For further information, please contact:
Keller Group plc www.keller.com
Alain Michaelis, Chief Executive Officer
Michael Speakman, Chief Financial Officer
Victoria Huxster, Head of Investor Relations
020 7616 7575
Finsbury
Gordon Simpson
James Kavanagh
020 7251 3801
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 six continents,
Keller tackles an unrivalled 7,000 projects every year, generating
annual revenue of more than GBP2bn.
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 Risk
Management approach and Principal Risks 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).
LEI number: 549300QO4MBL43UHSN10
Classification: 2.2 Inside information
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contact rns@lseg.com or visit www.rns.com.
END
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