Keller Group PLC Annual Financial Report
April 12 2013 - 3:00AM
UK Regulatory
TIDMKLR
Keller Group plc
12 April 2013
Keller Group plc ("the Company") - Annual Financial Report
In accordance with the Listing Rules, copies of the following documents have
been submitted to the National Storage Mechanism:
* Annual Report and Accounts for the year ended 31 December 2012 (the 'Annual Report 2012')
* The notice of annual general meeting 2013
* Form of proxy for the annual general meeting
These documents will shortly be available for inspection at the National
Storage Mechanism at www.hemscott.com/nsm.do.
The Annual Report 2012 is also available on the Company's website at
www.keller.co.uk. Hard copies of all the documents have been sent to shareholders.
The annual general meeting will be held at 11.00am on Thursday 23 May 2013 at
the offices of Investec, 2 Gresham Street, London, EC2V 7QP.
In accordance with DTR 6.3.5, this announcement contains information in the
attached Appendix of the principal risk factors, the directors' responsibility
statement and a note to the accounts on related party transactions. This
information has been extracted in full unedited text from the Annual Report
2012. References to page numbers and notes in the Appendix refer to those in
the Annual Report 2012. A condensed set of financial statements was appended
to Keller Group plc's preliminary results announcement issued on 4 March 2013.
For further information please contact:
Jackie Holman
Company Secretary
Appendix
Unedited extract from Annual Report 2012
Principal risks
Risk Description KPIs Controls
Market cycles Whilst our business will Revenue growth * Strategy of
always be subject to geographic
The Group's broad economic cycles, market compared with diversification:
base helps to risk is reduced by the
mitigate against diversity of our markets, market growth - operations in
the risk of both in terms of geography over 30 countries
downturn in and market segment. It is Definition and
also partially offset by - growing presence
our markets opportunities for method of in Australia and
consolidation in our highly calculation developing markets.
fragmented markets. Year-on-year * Broad customer
Typically, even where we sales base.
are the clear leader, we
still have a relatively growth in * Services used
small share of the market. local currency across all industry
Our ability to exploit segments:
these opportunities through compared with infrastructure,
bolt-on acquisitions is growth in industrial,
reflected in our track commercial,
record of growing sales, the total residential and
and doing so profitably, regional environmental.
across market cycles.
construction
market.
As our work
occurs at the
start of the
construction
cycle, our
revenue is a
leading
indicator for
the
construction
market,
whereas market
comparators
are based on
the lagging
indicator
'construction
put in
place'.
Tendering and It is in the nature of our Operating * Risk Management
business that we margin Framework defines
management continually assess and Minimum Standards
manage technical, and other in the control of
of projects operational, risks. project risk.
Definition and
Project risk is Some of the controls we method of * Risk-based
managed have in place, particularly tender
at the crucial stage of Calculation. approval
throughout the tendering of contracts, are Operating process, with
life of a set out in the table clear
opposite. Given the Group's profit delegations of
project from the relatively small average expressed as a authority.
tendering contract value (less than GBP
200,000), it would be percentage of * Independent
stage to unusual for any one revenue. review of tenders.
completion contract to
* Training for
materially affect the staff in the
results of the Group. In typical risk issues
fact, our largest contract they may face when
in 2012 accounted for less tendering for jobs,
than 3% of total revenue. negotiating
Our ability to manage contracts and
technical risks will executing work.
generally be reflected
* Legal review of
in our profitability. unusual or onerous
contract terms.
* Project staff
selected on the
basis of their
skills, experience
of a particular
type of project and
their workload.
* Establishment of
'centres of
excellence'.
* Formal handover
meetings at each
step of the
contract in
progress.
* Weekly cost
reports produced
for all projects
and reviewed by
next level
management.
* Periodic reviews
of poorly
performing
contracts to
establish lessons
learned with the
results
communicated to all
relevant staff.
Acquisitions We recognise the risks Return on net * Target companies
associated with operating are usually well
Our long-term acquisitions and our known to Keller;
growth approach to buying Assets and the operational
businesses aims to manage and cultural
track record is these to acceptable levels. differences and
built on a potential synergies
combination of First, we try to get to Definition and are well
organic growth know a target company, method of understood.
and acquisitions often working in joint
venture, to understand the calculation * Robust due
operational and cultural diligence process,
differences and potential Operating mostly undertaken
profit before by own management.
synergies. This is followed
by a robust due diligence impairment of * Clear
process, most of which is intangibles integration plan,
undertaken by our own reflecting the
managers, and we then expressed as a unique character of
develop a clear integration percentage the target company.
plan which takes account of of average net
the unique character of the operating
target company.
assets
(including
goodwill
acquired
through
acquisitions).
Net
operating
assets
excludes
net debt, tax
balances,
deferred
consideration
and net
defined
benefit
pension
liabilities.
Safety Keller is made up of Accident * Keller Safety
businesses Frequency Framework 'Think
The construction Safe',
industry in which of varying sizes operating Rate ('AFR') incorporating our
we operate poses around the world, often in Safety Goal,
significant challenging environments. Principles, Policy
safety and Minimum
challenges, but It is essential that, as we Definition and Standards.
we do not accept continue to grow and move method of
the inevitability into new regions, we can be * All business
of injury sure that our approach to calculation units undertake an
safety is equally rigorous, annual safety
no matter Accident assessment.
frequency per
whereabouts in the world, * From these,
or on which projects, we 100,000 man safety improvement
are working. hours. plans are developed
and implemented.
* Regular
directors' and
managers' safety
tours reinforce the
importance of
safety.
People The risk of losing, or not Staff turnover * Excellent
being able to attract, good rate training and
The accumulation people is key. We pride development
of ourselves in having some of opportunities.
the best professional and
knowledge and skilled people Definition and * Opportunities
experience is method of for career growth.
essential to in the industry, who are
helping our motivated by our culture calculation * Good engagement
customers to find and the opportunities for and two-way
the best career growth. The number of communications.
solutions
managerial, * Employees
professional treated with
dignity and
and technical respect.
staff leaving
in the period,
other than
through
redundancy or
normal
retirement,
expressed as a
percentage
of employees
in this
category.
Responsibility statement of the Directors in respect of the annual report and
the financial statements
We confirm that to the best of our knowledge:
* the financial statements, prepared in accordance with the applicable set of
accounting standards, give a true and fair view of the assets, liabilities,
financial position and profit or loss of the Company and the undertakings
included in the consolidation as a whole; and
* the Directors' report, including content contained by reference, includes a
fair review of the development and performance of the business and the position
of the Company and the undertakings included in the consolidation taken as a
whole, together with a description of the principal risks and uncertainties
that they face.
24 Related party transactions
Transactions between the parent, jointly controlled operations and its
subsidiaries, which are related parties, have been eliminated on consolidation
and are not disclosed in this note.
During the year the Group undertook various contracts with a total value of GBP
3.9m (2011: GBP2.3m) for GTCEISU Construcción, S.A., a connected person of Mr
López Jiménez, who retired as a Director of the Company during the year. An
amount of GBP5.6m (2011: GBP1.8m) is included in trade and other receivables in
respect of amounts outstanding as at 31 December 2012.
During the year the Group made purchases from GTCEISU Construcción, S.A. with a
total value of GBP2.0m (2011: GBP3.5m). An amount of GBP1.0m (2011: GBP1.0m) is
included in trade and other payables in respect of amounts outstanding as at 31
December 2012.
Related party transactions were made on an arms-length basis. All amounts
outstanding from related parties are unsecured and will be settled in cash. No
guarantees have been given or received. No provisions have been made for
doubtful debts in respect of the amounts owed by related parties.
The remuneration of the Directors, who are the key management personnel and
related parties of the Group is set out below in aggregate for each of the
relevant categories specified in IAS 24 Related Party Disclosures.
Key management personnel compensation comprised:
2012 2011
GBPm GBPm
Short-term employee benefits 3.4 2.1
Post-employment benefits 0.3 0.2
3.7 2.3
END
END
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