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RNS Number : 0821S
Keller Group PLC
15 November 2011
For immediate release Tuesday, 15 November 2011
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 14 November 2011.
Overview
Conditions across our mature markets remain difficult, with an
increasingly uncertain macro-economic outlook threatening any
significant recovery. Whilst our growth markets continue to offer
good prospects in the medium term, the overall picture remains
challenging.
Trading in the US and Europe has been in line with the Board's
expectations, but the results elsewhere have suffered from a
combination of tougher market conditions in certain locations and
delays in the start of a few large projects.
For the Group as a whole, the full year's revenue will be around
GBP1.15bn, in line with market expectations. However, the Board now
expects the 2011 full-year profit before tax to be below market
expectations and in the range of GBP21m to GBP23m.
Divisional Review
US
Although conditions in the US construction market overall remain
difficult, there are some signs that the market may have
stabilised. The competitive environment however remains extremely
challenging, with margins still at historically low levels.
Since the half year, contract awards to our US foundation
contracting businesses have continued at a good level and the order
book at the end of October is ahead of the previous year. The
first-half improvement in Suncoast has continued into the second
half of the year, helped by cost reductions implemented in the
second half of 2010.
For our US businesses as a whole, we expect 2011 revenue and
profits to be ahead of 2010, both in the second half and for the
full year.
Continental Europe, Middle East & Asia (CEMEA)
Within Continental Europe, trading in the last four months has
been broadly in line with the Board's expectations at the time of
the announcement of the Group's 2011 interim results. However,
order intake has trended down somewhat on the back of the renewed
macro-economic uncertainty and the order book, whilst still
relatively healthy, is now below the level of the same time last
year. Our Polish business has had a very strong year to date. The
business is currently slowing, having completed a number of major
projects, but tendering levels remain healthy. Elsewhere in
Continental Europe, our other major markets continue to be
difficult, with insufficient privately-financed projects to take up
the slack left by government austerity programmes.
In Asia, Resource Piling has had a very challenging time in
recent months, faced with a keenly competitive piling market in
Singapore. Elsewhere in our Asian markets, we continue to see good
demand for our products, although our second-half results in India
will be impacted by delays on two significant projects.
There has been little change in our trading in the Middle
East.
Australia
In Australia, the "two-speed" construction market continues,
mirroring the underlying economy. Prospects for projects related to
the resources sector remain strong, but commercial construction and
expenditure on infrastructure continue to be weak.
The recent end of the infrastructure boom in Queensland has
meant that Piling Contractors, our Brisbane-based business that is
largely reliant on the infrastructure market, has had a tough year.
This has been compounded by some difficult jobs as well as by costs
incurred in connection with possible work in New Zealand. As a
result, Piling Contractors will now make a loss in the full year.
Actions have been taken both to refocus the business and to reduce
its cost base by A$4m, with an associated one-off cost of about
A$2m. We expect Piling Contractors to return to profitability in
2012.
Prospects for the Australian businesses as a whole remain good,
with a number of significant projects in the pipeline.
UK
The underlying UK construction market remains extremely
difficult and we continue to take action accordingly. Last week, we
took the decision to close another of our UK offices, the third
regional office to be closed in the last two years.
As previously announced, our UK business won a number of major
infrastructure contracts in the summer. We have now started our
work at the projects for Crossrail although, as expected, this and
the major work in connection with the Victoria Station Upgrade will
not make a significant contribution to the UK results until
2012.
Financial Position
There has been no material change in the financial position of
the Group since the interim results announcement on 1 August 2011.
As previously advised, we refinanced our main central banking
facilities in December 2010 - replacing GBP145m of committed
facilities with a new GBP170m revolving credit facility, expiring
in April 2015 - and we continue to operate well within our
financial covenants.
Outlook
For the Group as a whole, the full year's revenue will be around
GBP1.15bn, in line with market expectations. However, the Board now
expects the 2011 full-year profit before tax to be below market
expectations and in the range of GBP21m to GBP23m.
Looking further ahead, the Group's order book at the end of
October was around 20% up on the same time last year, underpinned
by some very large projects in the UK and Australia. However, the
current macro-economic conditions mean that the outlook for
construction markets, particularly in Europe, remains uncertain. In
this environment, we will continue to exercise caution in our
management of costs and to focus on risk management, the most
efficient use of our resources and maximizing cash generation.
This prudent approach, together with our geographic
diversification, will help us in today's difficult markets, whilst
ensuring that we are well-placed to benefit as markets and
economies improve.
Keller will issue a pre-close statement in respect of the year
ending 31 December 2011 on 15 December 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, Talia Druker 020 7251 3801
A conference call for analysts is to be held at 09.00 on 15
November 2011 Contact Emma Russell at Finsbury (see above) for
dial-in details.
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 2010
revenue of GBP1,069m, Keller has over 6,000 staff world-wide, with
offices in around 40 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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