KLR Keller Group Plc

 

TIDMKLR 
 
RNS Number : 3781W 
Keller Group PLC 
18 November 2010 
 

 Thursday, 18 November 2010 
 
 
 
                                Keller Group plc 
                          Interim Management Statement 
 
 
 
Keller Group plc ("Keller" or "the Group"), the international ground engineering 
specialist, issues this Interim Management Statement covering the period from 1 
July to 17 November 2010. 
 
Overview 
 
Keller's developing markets still present excellent growth opportunities. 
However, conditions in the Group's mature markets continue to be difficult and 
the overall picture remains challenging. 
 
In the four months to the end of October, like-for-like revenue was in line with 
the same period last year.   This shows an improvement on the first six months, 
for which like-for-like revenue was down by 14% compared with the previous first 
half, in part reflecting the severe weather impact on many of the Group's 
businesses.  However, as anticipated at the time of the half-year results, 
intense competition in the Group's mature markets has meant that margins have 
remained under pressure. 
Management is implementing further cost reduction measures in its more difficult 
markets, which will result in a total of GBP3m of redundancy and other 
reorganisation costs in 2010, most of which will be incurred in the final 
quarter.   After taking account of these charges, the Board expects the 2010 
full-year results to be around the bottom end of the current range of market 
expectations. 
 
Divisional Review 
 
US 
 
Conditions in the general US construction market overall remain challenging, 
although the rate of year-on-year decline in spending has slowed. 
 
In the Group's US foundation contracting businesses, contract awards since the 
half year and the order book at the end of October were both ahead of the same 
time last year.   However, this has not yet fed through into higher activity 
levels and, as anticipated at the time of our half-year results, margins have 
remained under significant pressure.   Trading within Suncoast continues to be 
challenging, with its residential and commercial high-rise markets still in the 
doldrums, and management has responded with further headcount reductions in the 
second half. 
 
Continental Europe, Middle East & Asia (CEMEA) 
 
Within Continental Europe, the Group's Polish business has performed well in a 
market which remains strong and the business in Germany has continued to hold 
up.   Elsewhere in Continental Europe, conditions in our other major markets 
remain difficult, necessitating further cost reduction measures, most notably in 
France and Spain. 
 
With good demand for our products, we continue to grow profitably in India and 
our other Asian markets and the Middle East remains stable. 
 
Australia 
 
The Group's Australian business is still performing strongly, largely on the 
back of infrastructure and resources-related projects.  Looking ahead, this 
business should benefit from a number of major projects which are in the 
pipeline, albeit that some will not be awarded before late 2011. 
 
The integration of Waterway, the near-shore marine foundation contractor 
acquired by the Group in June 2010, is progressing well and already several 
opportunities have been identified where synergies exist with one or more of the 
Group's other Australian companies. 
 
UK 
 
The Group's business in the UK has continued to be beset by very weak market 
conditions.   Actions taken in the first half to reduce overheads and operating 
costs will not be sufficient to offset the impact on its full-year results of a 
reduction in volume in the second half. 
 
Financial Position 
 
The Group's financial position remains strong, with net debt at the end of 
October standing at approximately GBP109m (30 June 2010: GBP121m).   The Group 
continues to have sufficient available financing to meet all of its strategic 
and operational goals and the planned refinancing of the Group's central banking 
facilities is expected to be completed by the end of the year. 
 
Outlook 
 
After charging GBP3m of redundancy and other reorganisation costs, most of which 
will be incurred in the final quarter, the Board expects the 2010 full-year 
results to be around the bottom end of the current range of market expectations. 
 
The improvement in contract awards in the first half of the year has been 
maintained and, as at the end of October, the order book was 7% ahead of the 
same time last year on a constant currency basis, compared with 1% at the end of 
June.   However, as previously stated, underlying margins are not expected to 
begin to improve until such time as there is confidence in a sustained recovery 
in volumes. 
 
Keller will issue a routine pre-close statement in respect of the year ending 31 
December 2010 on 17 December 2010. 
 
For further information, please contact: 
 
+------------------------------------+------------------------+ 
| Keller Group plc                   |       www.keller.co.uk | 
+------------------------------------+------------------------+ 
| Justin Atkinson, Chief Executive   |          020 7616 7575 | 
+------------------------------------+------------------------+ 
| James Hind, Finance Director                                | 
+-------------------------------------------------------------+ 
|                                                             | 
+-------------------------------------------------------------+ 
| Finsbury                           |                        | 
+------------------------------------+------------------------+ 
| James Leviton, Clare Hunt, Alison  |          020 7251 3801 | 
| Kay                                |                        | 
+------------------------------------+------------------------+ 
 
 
 
 
This document contains forward-looking statements which have been made in good 
faith based on the information available at the time of its approval.   It is 
believed that the expectations reflected in these statements are reasonable, but 
they may be affected by a number of risks and uncertainties that are inherent in 
any forward-looking statement which could cause actual results to differ 
materially from those currently anticipated. 
 
 
Note to Editors 
 
Keller is the world's largest independent ground engineering specialist, 
providing technically advanced and cost-effective foundation solutions to the 
construction industry. With 2009 revenue of GBP1,038m, Keller is a member of the 
FTSE-250. It has around 6,000 staff world-wide, with offices in over 30 
countries on five continents. 
Keller is the market leader in the US and Australia; it has prime positions in 
most established European markets; and a strong profile in many developing 
markets. 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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