TIDMKLR
RNS Number : 1648R
Keller Group PLC
15 November 2012
For immediate release Thursday, 15 November 2012
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 2012.
Overview
The Group has performed strongly in the four months to the end
of October, with results exceeding the Board's expectations and
ahead of the same period last year. Accordingly, our second-half
results are expected to build on the improvements we reported in
the first half of 2012.
This further progress is being driven primarily by our North
American business where we are taking advantage of a gradual
improvement in the construction market. In Asia, the Group is also
trading well and elsewhere in the world, where market conditions
are more challenging, our businesses are proving resilient: in
EMEA, actions taken in the first half of the year will result in a
much improved second half, whilst Australia is trading ahead of
last year. All divisions have seen further benefits from the
business improvement initiatives announced in February,
particularly those focusing on strengthening risk management and
increasing our participation in large projects.
For the Group as a whole, project awards since the half year
have remained at a healthy level and the order book at the end of
October was around 10% above last year.
The Group's 2012 full-year revenue is expected to be around
GBP1.3bn, in line with market expectations. However, the Board now
expects the 2012 full-year profit before tax to be significantly
above the current range of market expectations.
Divisional Review
North America
The US construction market as a whole continues to show solid
growth, albeit not at the levels experienced in the first few
months of 2012, which benefitted from very benign weather. In the
nine months to the end of September, residential construction was
up 12% year-on-year and new housing starts were up around 25%.
Non-residential construction was up by 7% in the same period. This
growth was driven entirely by private expenditure; public
expenditure on construction was down 3% year-on-year. Within
private construction spend, the power segment has remained
particularly strong and our focus on transmission line work means
that we have been able to increase our exposure to this
segment.
Against this backdrop, our North American business has been
busy, with revenue growth for the financial year expected to
outperform the growth in the construction market as a whole for
2012. The first-half recovery in Suncoast is continuing through the
second half, with profitability steadily improving as volumes
increase. Within our foundation contracting businesses, despite
continuing overcapacity in many regions and market segments,
margins are improving as the Group benefits from the refocusing of
our business and our emphasis on higher-margin segments. The 2012
results have also benefitted from a good performance on several
large projects.
Whilst we experienced some short-term disruption to our
businesses in the North East of the US as a result of Hurricane
Sandy, this is not expected to have a material impact on financial
performance.
Europe, Middle East & Africa (EMEA)
In Europe, market conditions remain very challenging in most
markets. Within the Middle East, Saudi Arabia has remained steady
and we are seeing recent signs of increased activity in other parts
of the region.
Across our EMEA division, we have cut costs and restructured
businesses to a size and structure commensurate with their
depressed markets. These measures, together with good progress on
our major infrastructure projects in the UK and Poland, mean that
the second-half result for the division will, as expected, be much
improved on the first half.
Asia
Overall, our Asian markets have remained strong, helped by high
levels of public spending on construction in Singapore and
Malaysia. We have made excellent progress on our major project for
Vale in Malaysia, which we are on track to complete in the first
half of 2013. In India, a slowdown in the rate of economic growth,
combined with high interest rates and political uncertainty, has
pushed back several large infrastructure projects and led to lower
volumes. For the region as a whole, the full year result should be
in line with expectations.
Australia
The market conditions in Australia continue to reflect the
two-speed economy, with the resources sector remaining strong,
while infrastructure, commercial and residential remain depressed.
Within the resources sector, the recent fall in iron ore prices has
fed speculation as to whether forthcoming projects will go ahead as
planned, although our existing LNG projects remain unaffected.
Our Australian business has made good progress on a number of
large projects, including the Australia Pacific LNG Marine
Off-loading Facility at Gladstone, where we are on target to
complete our work ahead of schedule. In addition, we recently
successfully completed our test piling programme for the major
Wheatstone on-shore piling project.
Financial Position
There has been no material change in the financial position of
the Group since the interim results announcement on 30 July
2012.
Outlook
For the Group as a whole, the full-year revenue is expected to
be around GBP1.3bn, in line with market expectations. However, the
Board now expects the 2012 full-year profit before tax to be
significantly above the current range of market expectations.
Looking further ahead, at a macroeconomic level the outlook
remains extremely uncertain. Europe continues to face a number of
economic and political challenges, whilst the rate of growth in
much of Asia appears to be slowing. In the US, where the
construction market and economy as a whole are in the early stages
of recovery, this recovery is threatened by the "fiscal cliff".
Despite this backdrop, the Board believes that corporate actions
taken in recent years mean that the Group is better placed than
ever to face whatever economic headwinds may materialise. Longer
term, we remain confident that our strategy and our strengths will
underpin sustained future growth.
Keller will issue a pre-close statement in respect of the year
ending 31 December 2012 on 18 December 2012.
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, Rowley Hudson 020 7251 3801
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 annual
revenue of around GBP1.3bn, Keller has approximately 7,000 staff
world-wide.
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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