REG-Keller Group PLC: Trading Statement <Origin Href="QuoteRef">KLR.L</Origin>

KellerAnnouncement

16/11/2015 07:00

For immediate release                                                       
Monday 16 November, 2015

                               Keller Group plc                                

                                Trading update                                 

Keller Group plc ("Keller" or "the Group"), the international ground
engineering specialist, today issues a trading update, covering the period from
1 July 2015 to 15 November 2015.

Overview of markets

There has been no significant change in market conditions since we reported the
Group's half-year results on 3 August 2015.

In North America, which accounts for over half of the Group's revenue, the US
construction market continues to grow steadily while the market in Canada
remains very challenging. European construction markets as a whole remain
stable while the outlook in Australia shows no sign of improvement. 

Trading

Overall trading for the Group in the four months to the end of October has been
in line with management expectations.  Year to date revenue remains down on
last year as a result of lower revenues from major projects, primarily due to
the completion of the Wheatstone project in 2014.  Operating profit is ahead of
the same time last year, supported by solid operational progress and some good
final project settlements, particularly in the US.

The order book at the end of October, for work to be executed over the next
twelve months, including that of acquired businesses, is around 20% higher than
the same time last year.  On a like-for-like basis, this increase is around
15%.

The Board's expectations of the Group's results for the full year remains in
line with current market expectations.

Financial position

The financial position of the Group remains strong. There is comfortable
headroom in the Group's main financing facilities and we continue to operate
well within all of our financial covenants.

The acquisitions of GeoConstruction group ("Bencor") for a consideration of
US$44m (£29m) and Austral Construction Pty Limited ("Austral") for an initial
consideration of A$40m (£19m) were both completed in the period.

Other than the cash payments for these acquisitions, there has been no material
change in the financial position of the Group since 30 June 2015.

Divisional review

North America

The ongoing improvement in the US construction market continues to contribute
to good results from the Group's US businesses as a whole. Case and HJ, both of
which have strong positions in their regional markets, have performed well
whilst Suncoast continues to benefit from the increase in housing starts. 

Bencor, the business we bought earlier this year for its advanced diaphragm
wall technology, is being successfully integrated and working on a number of
prospects with other Keller businesses, both in the US and more widely.

Keller Canada is still operating in a very difficult market.  Ongoing cost
reductions have enabled the business to record a small profit.

Europe, Middle East and Africa (EMEA)

The EMEA division has continued to produce results ahead of last year, helped
by good profitability in the central European countries of Germany, Poland and
Austria where Keller has a strong pool of engineering excellence. 

Franki Africa is performing well and we are seeing increased opportunities in
the Middle East. The major contract in the Caspian region continues, albeit
slower than originally anticipated, and the next US$25m of work has just been
confirmed.

Asia

The performance of our Asian businesses has improved in recent months and the
Division will, as expected, have a much better second half.  The result is
underpinned by a major project in the refinery and petrochemical integrated
development (RAPID) complex in south-eastern Johor, Malaysia where we have just
secured another contract bringing the total value of Keller's contracted
projects on RAPID to US$46m.

In October, we won our first major ground improvement project in Indonesia for
around US$25m of vibro-compaction works at Pluit City, a newly created island
located near Jakarta.

Australia

Our foundations businesses continue to struggle in a difficult market and
further cost reductions are being implemented.

We expect to reach agreement on a final settlement on Wheatstone before the end
of the year, which will benefit the 2015 Australia results.

Waterways and Austral, our near-shore marine construction specialists, continue
to perform well. The integration of Austral is proceeding to plan.

Organisational changes

The Group has recently completed a strategic review of its organisational
capabilities.  The results will form the basis of how we operate in 2016 and
beyond.  Changes include the strengthening of key functions, formalising
product teams and rationalising structure where appropriate.  The Asia and
Australia divisions are to merge with effect from 1 January 2016 and the
structures within both are under review.  With effect from this date, the Group
will comprise three geographic divisions for management and reporting purposes;
North America, EMEA and the newly created Asia-Pacific ("APAC") division. 

We are also pleased to announce three Executive Committee appointments for
2016: Thorsten Holl, (ex-Alstom), as President of EMEA; Serge Zimmerlin,
(ex-Bouygues) as Group Human Resources Director; and Joseph Hubback in a newly
created role of Strategy Director (ex-McKinsey). 

Summary

While conditions remain challenging in many of the markets in which we operate,
the US construction market, the Group's largest market, remains healthy. This,
together with the benefits from internal measures, means that the Board remains
confident that the Group's results for the year will be in line with current
market expectations.

For further information, please contact:

Keller Group plc                                                              
              www.keller.co.uk
James Hind, Finance Director                                                  
      020 7616 7575

Finsbury
Gordon Simpson                                                                
           020 7251 3801
Rowley Hudson


Cautionary Statement:

This announcement contains forward looking statements which are 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.  Nothing in this document should
be regarded as a profits forecast.

Notes 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 £1.6bn, Keller has approximately
10,000 staff world-wide.

Keller is the clear market leader in North America, Australia and Southern
Africa; it has prime positions in most established European markets; and a
strong profile in many developing markets.  



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