TIDMKLR
RNS Number : 4586G
Keller Group PLC
12 May 2011
For immediate release Date - 12 May 2011
Keller Group plc
Interim Management Statement
Keller Group plc ("Keller" or "the Group"), the international
ground engineering specialist, issues its Interim Management
Statement covering the period 1 January to 11 May 2011.
Overview
As expected, we have seen no easing of the challenges facing our
industry in the first few months of this year. There has not been
any meaningful recovery in our construction markets in the US and
Western Europe, which were most severely impacted by the global
recession. Over capacity remains a significant issue, particularly
in the US, putting continued pressure on margins.
As expected, total revenue in the first four months was ahead of
the same period last year. Order intake remains robust and the
order book at the end of April was 9% ahead of 2010. We therefore
still expect to deliver solid revenue growth over the full
year.
However, the impact of lower margins in the US, combined with
the Australian floods and geopolitical issues in the Middle East
and North Africa, mean that the Board now expects that the Group's
EBIT for the year as a whole will be around 10% below that in 2010,
with the second half being broadly in line with last year.
Despite this, the Board remains convinced that the outlook for
global construction remains positive and that Keller is well placed
to take full advantage of opportunities both in its developing
markets and in its mature markets as these recover.
Divisional Review
US
In the US, expenditure in all sectors of the construction market
continued to fall in the first three months of the year, most
markedly the private non-residential sector, which contracted
year-on-year by a further 12% in the period.
As a result of this continued market deterioration, our US
foundation businesses have seen more intense pressure on margins
than they have previously experienced. This is particularly so in
that part of our business which is most exposed to smaller
contracts in the commercial sector. Accordingly, despite the
actions taken since the beginning of the recession to adapt these
businesses to their tough trading environments, our profits in the
US are expected to be no better than last year.
Whilst there has been no improvement in the US residential
sector, Suncoast has traded in line with our expectations in the
year to date.
Continental Europe, Middle East & Asia (CEMEA)
Across our diverse markets within the CEMEA division,
performance has been varied. In our developing markets, demand has
remained very strong in Poland and in South East Asia, where our
businesses have performed very well.
Our businesses in the Middle East and North Africa have been
severely disrupted by the civil unrest in many parts of these
regions and, as a result, have made a loss in the first four months
of the year.
Our Western European markets remain challenging but stable and
our trading in these regions has been as anticipated at the start
of the year.
Australia and UK
As expected, the Australian construction market as a whole is
experiencing something of a temporary lull, although activity
levels should pick up towards the end of the year, as some of the
larger, resource-related projects currently being tendered come on
stream.
The results of our Australian business for the first four months
were adversely impacted by the flooding in Queensland, the effects
of which proved to be longer
lasting than we had anticipated at the time of our full-year
results in February. However, the fundamentals of the business
remain very good.
The UK business has, as we expected, had a difficult year to
date, but is expected to have a better second half, as some of the
transport infrastructure projects in which it will be involved get
underway.
Financial Position
The Group's financial position remains strong. Other than the
normal seasonal increase in working capital, there has been no
significant change to our financial position since the last year
end.
Annual General Meeting and Interim Results
Keller will be holding its Annual General Meeting at 11.00 on 17
May 2011 at the offices of RBS Hoare Govett Limited, 250
Bishopsgate, London, EC2M 4AA.
The Company intends to announce its interim results on Monday, 1
August 2011.
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 020 7251 3801
A conference call for analysts is to be held at 09.00 on 12 May
2011. Please contact Sara Merrilees at Finsbury (see above) for
dial-in details.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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