TIDMKLR
RNS Number : 2053Q
Keller Group PLC
27 June 2022
27 June 2022
Keller Group plc
Major new contract, update on trading, strategic progress and
interim dividend increase
Keller Group plc ('Keller' or 'the Group'), the world's largest
geotechnical specialist contractor, today announces a trading
update ahead of the announcement of its interim results for the
half year ended 26 June 2022 scheduled for 2 August 2022.
Major new contract
Keller is one of a small number of geotechnical contractors to
have been selected to undertake work on the prestigious NEOM Giga
project in the Tabuk Province of North West Saudi Arabia. The first
element of the NEOM project is 'The Line', a 170-kilometre-long
mega-city, starting in the west at the Gulf of Aqaba, continuing
through the Sharma Valley and terminating at the NEOM International
Airport within the upper valley region. The Line is subdivided into
approximately 135 modules, each containing 8 buildings founded on
large diameter bored piles. Keller has signed an umbrella Framework
Agreement in respect of the project, and is mobilising for an
anticipated first works order on a portion of Module 40 which has
an expected value to Keller of around GBP50m, with the work
anticipated to be completed within the next twelve months. Further
works orders are expected to be awarded later in the year on
subsequent modules. We have a longstanding presence in Saudi Arabia
and we are delighted to have been invited to participate in NEOM, a
world class construction project. Following the signing of the
Framework Agreement Keller is very well positioned to participate
in the future geotechnical work, with the potential to generate
contract revenues in the hundreds of million pounds in future
years.
Trading Update
The Group is trading as anticipated in the first half of the
year and t he Board's expectations for the full year remain
unchanged. As previously indicated, we expect 2022 to be a year of
growth, with full year performance to have the customary second
half weighting, and to reflect our usual increase in trading
momentum as the year progresses. As previously highlighted, across
the Group we have successfully passed on a significant portion of
cost increases in the form of higher prices, preserving the
absolute level of profitability, whilst the relative measure has
been affected by materials shortages, the residual unrecovered
inflation and the dilution effect of the material costs passed
through to clients.
Our record order book continues to strengthen in terms of volume
and quality and is expected to be around GBP1.5bn at the half year,
increasing our confidence as we enter the second half of the year
and illustrating the Group's resilience in the current environment.
As well as NEOM, there have been a number of recent contract awards
and current prospects in the energy and infrastructure sectors
across the Group are encouraging. In particular, as a result of the
political migration away from dependency on Russian hydrocarbons,
there is a resurgence globally in Liquified Natural Gas (LNG)
activity, where Keller has both a well-established presence and an
excellent reputation. With its focus on US Gulf Coast LNG projects,
our recent RECON acquisition continues to perform very well and
ahead of our expectations, and we are confident of both new LNG
contract awards and the restart of currently suspended
projects.
Strategy Update
The Group continues to implement its strategy t o be the
preferred international geotechnical specialist contractor focused
on sustainable markets and attractive projects, generating long
term value for our stakeholders. During 2020 and 2021 we made
considerable progress rationalising and restructuring the Group's
geographic and service activities to create a more focused, higher
quality portfolio. We continue to refine our South West Europe and
our Middle East & Africa business units, both of which still
retain a legacy of geographically dispersed locations which will
benefit from further rationalisation and reorganisation.
Dividend increase
The Board recognises the importance of capital returns to our
shareholders and Keller has consistently and materially grown its
dividend in the 27 years since listing. This unbroken record of
dividends clearly demonstrates the Group's ability to continue to
prosper through economic downturns, including both the global
financial crises and the pandemic. In the recent AGM trading
statement, the Board stated that it would be reviewing the
progression of the dividend. Accordingly, the Board is announcing a
5% increase in the interim dividend to 13.2p (2021: 12.6p) as part
of the Group's interim results. The Board will also be reviewing a
further increase to the final dividend in respect of the current
year as part of the Group's return to a progressive dividend
policy, as well as reviewing other options for capital returns.
Keller continues to deliver strong, resilient cash generation.
The net debt to EBITDA (IAS 17 basis) leverage ratio at the half
year is expected to be around 1.2x, with an intention that this
reduces to below 1.0x at the year end.
Commenting, Michael Speakman, CEO Keller Group plc said:
"Our delivery in line with our first half expectations and the
Group's record and growing GBP1.5bn orderbook provides confidence
for our performance in the second half and delivering on our
expectations for the full year. Our involvement in the prestigious
NEOM project, together with a number of recent infrastructure and
LNG contract wins, evidences the diversity and inherent resilience
of the Group across the macroeconomic cycle. The underlying
strength of the Group's performance provides confidence in our
longer-term prospects and is reflected in the Board's decision to
recommence the progressive dividend policy with a 5% increase in
the interim dividend for the first half of 2022."
For further information, please contact:
Keller Group plc www.keller.com
Michael Speakman, Chief Executive Officer 020 7616 7575
David Burke, Chief Financial Officer
Caroline Crampton, Head of Investor
Relations
FTI Consulting
Nick Hasell 020 3727 1340
Matthew O'Keeffe
Notes to editors:
Keller is the world's largest geotechnical specialist contractor
providing a wide portfolio of advanced foundation and ground
improvement techniques used across the entire construction sector.
With around 10,000 staff and operations across five continents,
Keller tackles an unrivalled 6,000 projects every year, generating
annual revenue of more than GBP2bn.
Cautionary statements:
This document contains certain 'forward-looking statements' with
respect to Keller's financial condition, results of operations and
business and certain of Keller's plans and objectives with respect
to these items.
Forward-looking statements are sometimes, but not always,
identified by their use of a date in the future or such words as
'anticipates', 'aims', 'due', 'could', 'may', 'should', 'expects',
'believes', 'intends', 'plans', 'potential', 'reasonably possible',
'targets', 'goal' or 'estimates'. By their very nature forward
looking statements are inherently unpredictable, speculative and
involve risk and uncertainty because they relate to events and
depend on circumstances that will occur in the future. There are a
number of factors that could cause actual results and developments
to differ materially from those expressed or implied by these
forward-looking statements. These factors include, but are not
limited to, changes in the economies and markets in which the Group
operates; changes in the regulatory and competition frameworks in
which the Group operates; the impact of legal or other proceedings
against or which affect the Group; and changes in interest and
exchange rates. For a more detailed description of these risks,
uncertainties and other factors, please see the Principal risks and
uncertainties section of the Strategic report in the Annual Report
and Accounts. All written or verbal forward looking-statements,
made in this document or made subsequently, which are attributable
to Keller or any other member of the Group or persons acting on
their behalf are expressly qualified in their entirety by the
factors referred to above. Keller does not intend to update these
forward-looking statements. Nothing in this document should be
regarded as a profits forecast. This document is not an offer to
sell, exchange or transfer any securities of Keller Group plc or
any of its subsidiaries and is not soliciting an offer to purchase,
exchange or transfer such securities in any jurisdiction.
Securities may not be offered, sold or transferred in the United
States absent registration or an applicable exemption from the
registration requirements of the US Securities Act of 1933 (as
amended).
LEI: 549300QO4MBL43UHSN10
Announcement classification: 2.2 Inside information.
The person responsible for making this announcement is Kerry
Porritt, Group Company Secretary and Legal Advisor
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